No-deal Brexit ‘ruinous,’ says UK business secretary

Warnings from carmakers should be ‘listened to and acted on,’ Greg Clark told MPs.

LONDON — A no-deal Brexit would be “ruinous” for the U.K. economy, Business Secretary Greg Clark told MPs.

In one of the strongest warnings yet from a Cabinet minister about the risks leaving the EU without an agreement, Clark indicated that he fully endorsed warnings from Nissan and other carmakers about the disruption to trade that could result.

His comments place him at odds with Prime Minister Theresa May who, while seeking MPs’ approval for her Brexit deal, has refused to take no-deal off the table or withdraw her repeated insistence that “no deal is better than a bad deal.”

Speaking in the House of Commons following Nissan’s reversal of plans to build its new X-Trail model in the U.K., Clark said the firm had warned that the risk of a no-deal Brexit was causing “damaging uncertainty.”

“No deal is fully acknowledged, certainly by me and the industry as being ruinous for our prospects,” he said. “… in order to avoid no deal we need to come to an agreement in this House.”

Theresa May’s Brexit deal was rejected by the House of Commons | Jack Taylor via Getty Images

He urged MPs to get behind May’s deal to prevent the U.K. leaving without an agreement, saying that while the carmakers’ decision was made “on broader business grounds,” they had urged MPs to “come together and to resolve the question of our future trading relationship with the EU.”

“I believe their advice should be listened to and acted on,” he added.

Labour MP Chris Bryant said that Cabinet ministers were “the only people” who could stop no-deal.

“They’ve got to go back to the Cabinet and say to the prime minister: ‘we will not put up with this, this will do lasting damage to our country … and we must put a stop to it, otherwise we will resign.’”

Clark responded that it was a “matter of public record” that he had called for a close trading relationship to protect jobs and that it was “important that I should do that.”

In an interview with the Times last week, Clark said that businesses considered a no-deal Brexit “a disaster,” but asked whether he would resign to try to stop it said: “I will not desert my post while I can influence what I see as the requirement for a responsible government to make sure we achieve a deal.”

This article is part of POLITICO’s premium Brexit service for professionals: Brexit Pro. To test our our expert policy coverage of the implications and next steps per industry, email pro@politico.eu for a complimentary trial.


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In so many areas the EU’s negotiating stance is sadly defined by the politics of punishment, rather than economics

The news that Boeing has just opened a £40 million manufacturing facility in Sheffield to make parts for their latest 737 and 767 aircraft, which are assembled in the United States, serves to remind us that our world-class aerospace business is global and to torpedo the claims of Airbus – and some car manufacturers – […]

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The news that Boeing has just opened a £40 million manufacturing facility in Sheffield to make parts for their latest 737 and 767 aircraft, which are assembled in the United States, serves to remind us that our world-class aerospace business is global and to torpedo the claims of Airbus – and some car manufacturers – that Brexit will threaten jobs in the UK because it will cause havoc to the just-in-time manufacturing process. Boeing’s plans call for the production of 52 aircraft a month with thousands of parts being shipped every month to Portland, Oregon, so timely delivery will be just as critical to Boeing as it is to Airbus.

So, the question arises: if Boeing can operate a slick production process using parts made in Britain, shipped six times the distance to their assembly line compared to shipping Airbus parts from Bristol or North Wales to Hamburg or Toulouse (and BAE ship 15% of every single F35 Joint Strike Fighter to the Lockheed Martin plant in Dallas), what is Airbus’s problem? The answer lies not in economics but in politics.

As is increasingly clear, despite protestations to the contrary, elements of the EU really do want to punish the UK for having had the insolence to Leave and to deter other countries from following our lead. France seems to be the most determined to press for punishment, partly to try to seize the City of London’s business and partly to promote President Macron as the new EU leader as Angela Merkel’s grip weakens.

Recently there were reports, subsequently denied, that President Macron intended to require UK visitors to France to obtain visas whilst those Brits with homes in France would immediately upon Brexit become illegal visitors. Apparently, the word ‘not’ was omitted in translation and the proposed new law designed to prevent such action. However, Dominic Raab subsequently spoke about the possibility of France ‘deliberately’ delaying lorries entering the port of Calais.

Earlier this year, the EU announced the creation of a fund to develop new defence equipment, a programme from which the UK, home to Europe’s largest defence contractor and with the largest defence budget in Europe, was to be excluded. Furthermore, the UK is to be ejected from key parts of the EU satellite navigation programme, Galileo, despite having contributed £1.2 billion and constituting, through Airbus subsidiary Surrey Satellites, a key portion of the technology. Any reasonable person would ask where was the commercial, let alone defence, interest in excluding such a major European player. Again, the answer lies not in economics but in politics: the UK has to be punished even if it means damaging the defence interests of the continent.

As we approach the sombre commemorations of the centenary of the 1918 armistice which ended The Great War, it is worth pausing to reflect on the role of some of those nations who, in the famous words of Margaret Thatcher, ‘we either rescued or defeated’.  The British people have voted freely but decisively to Leave the EU, yet face punitive measures by some on the continent for whose liberation in two world wars this country and its Empire shed 1,300,000 lives. Whilst falling over themselves to secure favourable trade deals with the rest of the world, the EU’s leaders have adopted the reverse policy with their closest neighbour, refusing to discuss trade arrangements before sorting out an artificial problem of their creation by weaponising the Irish border, a clear solution to which has been proposed by the ERG and others.

In another example of the pathetic approach in Brussels, I understand that the EU’s aviation safety agency, EASA, is debarred from discussing with our CAA how we manage air travel post Brexit.  Given the UK’s prominence in air transport, with Heathrow being the most important transatlantic gateway airport in Europe, why is EASA not engaged in constructive debate? Iceland, Norway and Switzerland are members of EASA even though they are not EU members, so why remove the UK? Again, the answer lies in politics, not economics. They want to cause inconvenience, if not chaos, to rub home to the others the cost of recovering national sovereignty.

All this illustrates the fundamental naivety exhibited by the UK at the outset of the negotiations, namely that if we conceded and acted in a friendly fashion the EU would respond in similar vein, leading many Leave voters to question the motives of those in charge. We never acknowledged the determination of the Commission to protect The Project (to create the United States of Europe) and we failed to recognise the strength of the cards in our hands.

So we threw away the security card, offering unconditional support to the 27, only to be rewarded by exclusion from EU defence programmes. The Prime Minister offered to pay a staggering £39 billion of our money in return for – nothing. Well, if she thinks British taxpayers will tolerate that, I fear she is mistaken. I can no longer withhold my vote in Parliament, but I can withhold my taxes unless I see a fair trade deal is secured.

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