No impact assessments!? What exactly have you been doing Mr Davis?

PUBLISHED: 12:02 06 December 2017

Brexit Secretary David Davis gives evidence on developments in European Union divorce talks

Brexit Secretary David Davis gives evidence on developments in European Union divorce talks

PA Wire/PA Images

David Davis has admitted no assessment of the impact Brexit will have on the UK economy has been done.

The astonishing revelation came as the Brexit Secretary faced a grilling from MPs over the state of the country’s bungled attempts to leave the European Union.

The news that no time had been spent on a forecast became even more staggering when Davis told the House of Commons Exiting the EU Committee that

Brexit would provoke a “paradigm change” in the UK economy in a similar way to the financial crash of 2008.

Defending his department Davis said officials would “at some stage” during the second phase of Brexit negotiations quantify the different possible outcomes, such as a free trade agreement with the EU or moving to World Trade Organisation rules.

But chairman of the committee, Labour MP Hilary Benn, described the decision as “rather strange” when ministers were hoping within weeks to enter into a fundamental renegotiation of Britain’s trade relations with the rest of Europe.

“You have said there are no impact assessments,” Benn said. “You were hoping that at the October (European) Council, the door would be open to phase two of the negotiations, where the question would be asked ‘What does the UK Government want?’

“Are you actually telling us that the Government hadn’t at that point - and still hasn’t - undertaken the assessment?”

Davis said that assessments had never been carried out in the form suggested when Parliament demanded their release.

“You don’t need to do a formal impact assessment to understand that if there is a regulatory hurdle between your producers and a market, there will be an impact,” he told the committee.

“It will have an effect, the assessment of that effect is not as straightforward as people imagine. I’m not a fan of economic models because they have all proven wrong. When you have a paradigm change – as happened in 2008 with the financial crisis – all the models were wrong. The Queen famously asked why did we not know.

“Similarly, what we are dealing with here in every outcome – whether it is a free trade agreement, whether it is a WTO outcome or whether it is something between that on the spectrum – it is a paradigm change.

“We know not the size, but the order of magnitude of the impact.”

Benn continued: “Doesn’t it strike you as rather strange that the Government undertakes impact assessments of all sorts of things all the time, but on the most fundamental change that we are facing as a country, you’ve just told us that the Government hasn’t undertaken any impact assessments at all on the implications for various parts of the economy?”

Last week Davis handed over 850 pages of what he called “sectoral analyses”, looking at the condition of various parts of the UK economy and their current involvement in the EU market but making no forecasts on the likely impact of Brexit.

Davis’s admission provoked outrage among opposition MPs. A Labour member of the Brexit committee, Seema Malhotra, described the failure to make assessments as “a dereliction of duty”.

Labour trade spokesman Bill Esterson said: “Did he know that the impact assessments didn’t exist when he said they did? It was either incredibly incompetent or incredibly dishonest. Either way, how is Davis still in his job?”

Scottish National Party MP Joanna Cherry said Mr Davis’s evidence appeared to “directly contradict what he and other UK Government ministers have previously told Commons’ committees”, adding: “This is pretty serious.”

Davis first told the committee in December 2016 that his department was “in the midst of carrying out about 57 sets of analyses” on different parts of the economy, each of which has implications for individual parts of 85% of the economy.

In an interview in June, he said that work had been completed on “nearly 60 sector analyses”. And in October, he told the Brexit committee that Prime Minister Theresa May had read “summary outcomes” of impact assessments, which he said went into “excruciating detail”.

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