The Costs of Brexit

Once again Parliament is faced with important votes on Brexit this week. And once again strong opinion on both sides is drowning the facts. 

In the last few weeks we have heard repeated warnings about the impact of Brexit on jobs and investment, whether we leave with or without a deal. And in the last month alone announcements by Nissan and Honda have turned these warnings into concrete, quantifiable job losses. We also now know that the top civil servant at the Department for Exiting the EU is leaving at the end of March and handing over to Defra chief Clare Moriarty. A game of musical chairs that is unhelpful at such a critical time.

Concrete and quantifiable promises, outcomes and spending are the bread and butter of my Parliamentary life chairing the House of Commons public spending watchdog, the Public Accounts Committee. And the Public Accounts Committee has been working hard to examine how well-prepared Government departments are for leaving the EU. So far we have published nine reports which all have a common theme: we are just not ready to leave by the 29th March, especially under a no-deal scenario.

Triggering Article 50 so quickly and with no clear plan was both reckless and costly.

Preparing for Brexit

There are over 300 Brexit workstreams across Whitehall. The Public Accounts Committee has wrestled with Whitehall to have details of the workstreams released. The Government pushed back suggesting that to release this information would be to hand an advantage to the EU in our negotiations.

Eventually we secured release of the titles but no detail. In reality any savvy commentator could work up the likely list of what needs to be done. Speak to someone in a specialist sector – for example at any of the UK’s ports – and they will reel off a long list of what is still not ready for the 29th March.

Yet the Government’s secretive approach to Brexit dominated and those same specialist sectors have been asked to sign non-disclosure agreements on an unprecedented scale. We cannot see how these would, in most cases, affect the UK’s negotiating position. Preparing ports, managing licences and organising transit are all plans which UK citizens and Brussels would expect the Government to be working on.

It has been the preparations for every imaginable Brexit scenario that has pushed up costs for both the taxpayer and business. Had the PM not triggered Article 50 without a plan and then been so late to engage business, there would not be the current wasteful and panicked last-minute preparations.

The Costs of Brexit

Michael Gove reportedly criticised Chancellor Philip Hammond in a recent cabinet meeting for not releasing money quickly enough in a deliberate attempt to frustrate Brexit preparations. These same criticisms were used this last week by Conservative MPs in defence of Chris Grayling’s performance over the fallout of the Seaborne Freight contract which led to the Government’s £33m settlement with Eurotunnel.

The reality is that all Government departments were able to spend money under a blanket ministerial direction if they needed to before legislation was passed. So far the Treasury has set aside £4.2 billion on Brexit preparedness alone. In addition, 10,000 civil service staff have been recruited with a further 5,000 in the pipeline.

The full bill and opportunity cost of diverting resources to prepare for a no deal exit has still to be calculated.

As we approach these final votes I am clear that Whitehall is not ready for Brexit. But it’s cheap politics to lay the blame on the civil service. While I would be the first to highlight failed Government projects – delivering the number of major projects required in two years was a predictable challenge. It was a political decision to press ahead regardless.

The refusal of the Government to rule out leaving without a deal has wasted £billions of taxpayers' money as all departments are preparing simultaneously for leaving under both scenarios.  

Brexit votes

If the rumours are true that the Prime Minister may prevent Parliament from ruling out a no deal exit, this would be reckless. It has been costly to the taxpayer to get this far without ruling it out but to crash out would pass on huge and unpredictable costs to business and individuals, with real risks of food and medicine shortages.

Parliament must get the chance to vote down a no deal option if the Prime Minister cannot get agreement on her deal.

I am also clear that the status quo cannot continue if Parliament, sensibly, chooses to extend Article 50. The taxpayer and business cannot keep picking up the tab for Conservative indecision over Brexit.

The public should be given the chance to look at the facts and decide for themselves in a fresh public vote whether the cost of leaving is something they support.