The Tory government is facing fresh embarrassment over Brexit after the UK’s budget watchdog flatly contradicted claims that it will weigh up the financial risks of quitting the EU without a trade deal.
Standing in for Theresa May at Prime Minister’s question time, First Secretary of State Damian Green surprised MPs by suggesting the Office of Budget Responsibility (OBR) would produce an expert report on the issue.
But the OBR swiftly confirmed to HuffPost UK that its first ever ‘Fiscal Risks’ study, due on Thursday, would not have detailed forecasts for any version of Brexit.
“We have got no basis on which to assess specific outcomes at this stage,” a spokesman explained. “It would be close to impossible to work out.”
The OBR, which is independent of Government, also tweeted its stance.
The row started when Shadow Foreign Secretary Emily Thornberry challenged Green over perceived Cabinet divisions on Brexit.
Theresa May has famously claimed that “no deal is better than a bad deal” with the EU, and some Eurosceptics suggest the UK can survive on World Trade Organisation (WTO) rules alone.
Foreign Secretary Boris Johnson had told the Commons on Tuesday that “there is no plan for ‘no deal’ because we are going to get a great deal”. But No10 made clear Brexit Secretary David Davis is “planning for all eventualities”.
Thornberry asked: “Can the First Secretary clear up the confusion today: is there a contingency plan for no deal or isn’t there?”
Green replied: “The OBR is publishing its fiscal risks report tomorrow, so if she will be patient she will see the report she wants”.
But the OBR revealed its first bi-annual risk report would not include any such specific projections for either a ‘no deal’ scenario or anything else.
The report, first commissioned by former Chancellor George Osborne in 2015, aims to set out all the economic risks to the UK.
It will assess the impact on tax receipts and other finances from a range of factors and include a “stress test”.
Individual sections such as immigration will include a ‘Brexit’ health warning that the risks would alter after the UK quits the UK in 2019, but they will not quantify the impact.
Shadow Chancellor John McDonnell told HuffPost UK: “It’s either a blunder by Damian Green or he is trying to get his excuses in early.
“He must have seen the advance of the OBR report and wants to blame it on Brexit and not the shoddy record of this weak Tory government.”
A Labour spokesman added: “It looks as though we are getting yet more chaos and confusion from the government on Brexit, not the answers we were promised. But this is serious. Damian Green told Parliament today we would see the internal assessment on the impact of a ‘no deal’ Brexit on jobs and growth, and if that is not what we get tomorrow, we will be demanding to know why.”
In the Commons, Thornberry added: “We’ve got a no deal option on the table... We’ve got a Foreign Secretary making it up as he goes along, we’ve got a Brexit Secretary so used to overruling his colleagues that he’s started to overrule himself, and we’ve got a PM so bereft of ideas she’s started putting suggestion boxes around Parliament.
“But as a country we’ve got 20 months until Brexit and we’ve absolutely got to get a grip. If the party opposite does not have the strength for the task, then we’ve got to get rid of them.”