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You can find the current article at its original source at https://www.theguardian.com/politics/2019/jul/01/brexit-tory-leadership-no-deal-risk-business-alarm-jeremy-hunt-boris-johnson
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| Brexit: both Tory sides play down risk of no-deal after business alarm | Brexit: both Tory sides play down risk of no-deal after business alarm |
| (7 days later) | |
| Supporters of the two Conservative leadership candidates have sought to play down the chances of a no-deal Brexit, after business groups reiterated their warnings about the economic damage this could wreak. | Supporters of the two Conservative leadership candidates have sought to play down the chances of a no-deal Brexit, after business groups reiterated their warnings about the economic damage this could wreak. |
| Liam Fox, a supporter of Jeremy Hunt – who said on Sunday he would be willing to tell businesses that went bust because of no deal that it was a necessary sacrifice – said a new EU commission should be willing to make a deal. | Liam Fox, a supporter of Jeremy Hunt – who said on Sunday he would be willing to tell businesses that went bust because of no deal that it was a necessary sacrifice – said a new EU commission should be willing to make a deal. |
| Meanwhile Matt Hancock, who after dropping out of the race himself threw his support behind Boris Johnson, said Johnson’s hard-and-fast deadline of 31 October meant departure with a deal was more likely. | Meanwhile Matt Hancock, who after dropping out of the race himself threw his support behind Boris Johnson, said Johnson’s hard-and-fast deadline of 31 October meant departure with a deal was more likely. |
| Business groups and Conservative sources expressed alarm after Hunt, normally seen as the more moderate of the pair on Brexit, told the BBC he would push for no deal if, by the start of October, there was no chance of a new negotiated settlement. | Business groups and Conservative sources expressed alarm after Hunt, normally seen as the more moderate of the pair on Brexit, told the BBC he would push for no deal if, by the start of October, there was no chance of a new negotiated settlement. |
| Asked whether he would be willing to look the owners of family businesses in the eye and say they should be prepared to see their companies go bust to ensure a no-deal Brexit, Hunt said: “I would do so but I’d do it with a heavy heart precisely because of the risks.” | Asked whether he would be willing to look the owners of family businesses in the eye and say they should be prepared to see their companies go bust to ensure a no-deal Brexit, Hunt said: “I would do so but I’d do it with a heavy heart precisely because of the risks.” |
| In a ‘no deal’ scenario, the UK would leave the single market and the customs union immediately with no ‘divorce’ arrangement in place. The European court of justice would cease to have jurisdiction over the UK, and the country would also leave various other institutions including Euratom and Europol. | In a ‘no deal’ scenario, the UK would leave the single market and the customs union immediately with no ‘divorce’ arrangement in place. The European court of justice would cease to have jurisdiction over the UK, and the country would also leave various other institutions including Euratom and Europol. |
| The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment. There would be no transition period. Free movement of people into the UK from the EU27 would stop. | The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment. There would be no transition period. Free movement of people into the UK from the EU27 would stop. |
| Trade between the UK and the EU would be governed by basic WTO rules. The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports - making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO ‘most favoured nation’ rules it must also offer the same zero tariffs to other countries. | Trade between the UK and the EU would be governed by basic WTO rules. The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports - making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO ‘most favoured nation’ rules it must also offer the same zero tariffs to other countries. |
| WTO rules only cover goods - they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. | WTO rules only cover goods - they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. |
| Some ‘no deal’ supporters have claimed that the UK can use article 24 of the General Agreement on Tariffs and Trade (Gatt) to force the EU to accept a period of up to ten years where there are no tariffs while a free trade agreement (FTA) is negotiated. However, the UK cannot invoke article 24 unilaterally - the EU would have to agree to it. In previous cases where the article has been used, the two sides had a deal in place, and it has never been used to replicate something of the scale and complexity of the EU and the UK’s trading relationship. | Some ‘no deal’ supporters have claimed that the UK can use article 24 of the General Agreement on Tariffs and Trade (Gatt) to force the EU to accept a period of up to ten years where there are no tariffs while a free trade agreement (FTA) is negotiated. However, the UK cannot invoke article 24 unilaterally - the EU would have to agree to it. In previous cases where the article has been used, the two sides had a deal in place, and it has never been used to replicate something of the scale and complexity of the EU and the UK’s trading relationship. |
| The Director General of the WTO, Roberto Azevêdo, has told Prospect magazine that "in simple factual terms in this scenario, you could expect to see the application of tariffs between the UK and EU where currently there are none." | |
| Until some agreements are in place, a ‘no deal’ scenario will place extra overheads on UK businesses - for example the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europe after 31 October if there is no deal. Those arguing for a ‘managed’ no deal envisage that a range of smaller sector-by-sector bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or rapidly remove this kind of bureaucracy. | Until some agreements are in place, a ‘no deal’ scenario will place extra overheads on UK businesses - for example the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europe after 31 October if there is no deal. Those arguing for a ‘managed’ no deal envisage that a range of smaller sector-by-sector bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or rapidly remove this kind of bureaucracy. |
| Martin Belam | Martin Belam |
| Fox, the international trade secretary, said that while the UK was “not entirely in control” of whether no deal happened, he believed it would not. | Fox, the international trade secretary, said that while the UK was “not entirely in control” of whether no deal happened, he believed it would not. |
| “You have got a new commission coming in, and we will have a new prime minister. The European Union have to listen to the economic realities,” he told BBC Radio 5 Live. | “You have got a new commission coming in, and we will have a new prime minister. The European Union have to listen to the economic realities,” he told BBC Radio 5 Live. |
| “It’s rational. Britain is not asking for anything that’s unreasonable. We’re simply saying: we have an agreement to leave the European Union. We want some changes to the backstop arrangement to make it get through parliament. And then we can leave with a deal, which is in everybody’s interests.” | “It’s rational. Britain is not asking for anything that’s unreasonable. We’re simply saying: we have an agreement to leave the European Union. We want some changes to the backstop arrangement to make it get through parliament. And then we can leave with a deal, which is in everybody’s interests.” |
| However, Fox stressed he would prefer no deal to a second Brexit referendum. | However, Fox stressed he would prefer no deal to a second Brexit referendum. |
| “It’s up to us to be very clear to the European Union that we want a deal, but if we can’t get one that’s satisfactory, we can’t get one that goes through parliament, then the default position within our law is that we leave without a deal, and we have to make the proper preparations so that is a credible position,” he said. | “It’s up to us to be very clear to the European Union that we want a deal, but if we can’t get one that’s satisfactory, we can’t get one that goes through parliament, then the default position within our law is that we leave without a deal, and we have to make the proper preparations so that is a credible position,” he said. |
| Hunt was on Monday due to make a speech setting out a 10-point plan to mitigate the effects of no deal, including £6bn to protect fishing and agriculture. It would also include a new, dedicated committee with special powers to boost no-deal planning and a logistics committee to assist with imports and exports. | Hunt was on Monday due to make a speech setting out a 10-point plan to mitigate the effects of no deal, including £6bn to protect fishing and agriculture. It would also include a new, dedicated committee with special powers to boost no-deal planning and a logistics committee to assist with imports and exports. |
| Fox denied no deal would be disastrous, saying: “I’m not sure it would be catastrophic. I think that there would be problems, and that’s exactly what Jeremy Hunt is setting out today.” | Fox denied no deal would be disastrous, saying: “I’m not sure it would be catastrophic. I think that there would be problems, and that’s exactly what Jeremy Hunt is setting out today.” |
| Hancock, the health secretary, told BBC Radio 4’s Today programme that Johnson’s pledge to leave on 31 October “do or die” minimised the risk of no deal. | Hancock, the health secretary, told BBC Radio 4’s Today programme that Johnson’s pledge to leave on 31 October “do or die” minimised the risk of no deal. |
| “The reason that I’m [backing] Boris Johnson is because I think he’s best placed to deliver Brexit and then to unite the country,” he said. | “The reason that I’m [backing] Boris Johnson is because I think he’s best placed to deliver Brexit and then to unite the country,” he said. |
| “The best way to deliver Brexit is with a deadline, and Boris is the only candidate with a deadline. No deadline risks no Brexit, and slip-sliding towards a second referendum, which I don’t want to see.” | “The best way to deliver Brexit is with a deadline, and Boris is the only candidate with a deadline. No deadline risks no Brexit, and slip-sliding towards a second referendum, which I don’t want to see.” |
| Hancock had a very different approach to Brexit when he was still in the race, and was challenged repeatedly on how he could now support Johnson. “You’ve got to look forward in life,” he said. | Hancock had a very different approach to Brexit when he was still in the race, and was challenged repeatedly on how he could now support Johnson. “You’ve got to look forward in life,” he said. |
| Hancock indicated he still disliked the idea of proroguing, or suspending, the Commons to stop MPs blocking no deal, but refused to condemn Johnson for not ruling this out as a tactic. | Hancock indicated he still disliked the idea of proroguing, or suspending, the Commons to stop MPs blocking no deal, but refused to condemn Johnson for not ruling this out as a tactic. |
| “I don’t foresee that happening. The whole point of Brexit – this where he and I strongly agree – is to return parliamentary sovereignty to the UK,” he said, adding: “I don’t think that that is where this is going to end up.” | “I don’t foresee that happening. The whole point of Brexit – this where he and I strongly agree – is to return parliamentary sovereignty to the UK,” he said, adding: “I don’t think that that is where this is going to end up.” |
| Hancock explained why he was now backing Johnson: “I clearly made my case to win, and I didn’t get the support in order to be able to proceed, and then you deal with the world as it is. And you have to ask the question: who is best placed to deliver Brexit? Answer: Boris Johnson.” | Hancock explained why he was now backing Johnson: “I clearly made my case to win, and I didn’t get the support in order to be able to proceed, and then you deal with the world as it is. And you have to ask the question: who is best placed to deliver Brexit? Answer: Boris Johnson.” |
| He said: “Part of being able to deliver, when you’re in government, when you’re in politics, is about uniting people who have a range of views. And Boris’s ability to bring people behind him from different parts of the party is a great strength, and by God that’s needed.” | He said: “Part of being able to deliver, when you’re in government, when you’re in politics, is about uniting people who have a range of views. And Boris’s ability to bring people behind him from different parts of the party is a great strength, and by God that’s needed.” |
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