Prepare for no Brexit deal, David Davis tells Cabinet

Posted On: 
28th February 2017

Cabinet ministers have been told to prepare for the UK falling out of the European Union without a replacement trade deal.

David Davis was appointed Brexit Secretary in July
PA Images

In a meeting of her top team this morning the Prime Minister insisted that she “will not fail” to secure her goal of a comprehensive agreement with the EU on trade, security, research and other issues.

But Brexit Secretary David Davis underlined the need for departmental heads to be ready for the “unlikely scenario” that no deal can be reached.

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Theresa May said in her Lancaster House speech last month that “no deal for Britain is better than a bad deal for Britain”, and suggested the UK could slash taxes and regulations to remain competitive if it is denied access to European markets.

That proposition has raised alarm among some politicians domestically and abroad, with George Osborne warning this morning that withdrawing from the EU without securing a trade deal would be the “biggest act of protectionism” in the history of the UK.

A “good majority” of this morning’s Cabinet discussion was dedicated to Brexit, with Mr Davis updating ministers on progress in preparing for the triggering of Article 50, which Mrs May has said she will do by the end of March.

The Prime Minister’s spokesman said of the discussions: “He [Mr Davis] set out the fact that the Government is now tackling what is its most important peacetime operation and it’s important that departments understand the challenges that lie ahead.

“He then set out the need for the Government to support a smooth exit from the EU in the full range of policy areas that would be affected.

“And he also pointed out the need to make clear that we need to prepare not just for a negotiated settlement but also for the unlikely scenario in which no mutually satisfactory agreement can be reached.”

Mr Davis told ministers they should be running "parallel processes" to prepare for both the positive and pessimistic scenarios for the Brexit negotiations.

Mrs May then “stressed that we must be optimistic and that our message is that we are not going to fail, we are going to make a success of it, it is going to be complex and difficult but our optimistic view is important,” the spokesman added. 

International trade was the other issue discussed at Cabinet, No 10 said.