Brexit could have as big an impact on the British economy as the 2008 credit crunch, David Davis today said.
The Brexit Secretary said quitting the Brussels cub will amount to a ‘paradigm change’ comparable with the biggest financial slump since the Depression of the 1930s.
He made the extraordinary comment as he was called before the Brexit select committee to explain why no impact assessments on leaving the EU have been carried out by Whitehall.
Mr Davis told the committee: ‘You don’t need to do a formal impact assessment to understand that if there is a regulatory hurdle between your producers and a market, there will be an impact.
‘It will have an effect, the assessment of that effect is not as straightforward as people imagine.
‘I’m not a fan of economic models because they have all proven wrong.
‘When you have a paradigm change – as happened in 2008 with the financial crisis – all the models were wrong. The Queen famously asked why did we not know.
The Brexit Secretary David Davis, pictured today, said quitting the Brussels cub will amount to a ‘paradigm change’ on a level with the biggest financial slum since the Depression of the 1930s
David Davis made the extraordinary comment as he was called before the Brexit select committee to explain why no impact assessments on leaving the EU have been carried out by Whitehall
‘Similarly, what we are dealing with here in every outcome – whether it is a free trade agreement, whether it is a WTO (World Trade Organisation) outcome or whether it is something between that on the spectrum – it is a paradigm change.
‘We know not the size, but the order of magnitude of the impact.’
Mr Davis confirmed no impact assessments have been conducted Government on the likely results of Brexit for individual sectors of the economy, such as automotive, aerospace or financial services.
Instead he said officials will ‘at some stage’ during Brexit trade talks conduct work to quantify the effects of different possible outcomes on the economy.
MPs had used an archaic paramilitary tactic known as a humble address to force ministers to release reports looking at the possible economic impact of Brexit.
But the chairman of Brexit select committee, Labour MP Hilary Benn, described the decision as ‘rather strange’ when ministers were hoping within weeks to enter into a fundamental renegotiation of Britain’s trade relations with the rest of Europe.
He said: ‘You have said there are no impact assessments.
‘You were hoping that at the October (European) Council, the door would be open to phase two of the negotiations, where the question would be asked ‘What does the UK Government want?’
David Davis, pictured leaving Whitehall this morning, is facing a race against time to get the DUp signed up to a deal to move talks on to trade by Christmas
The minister was appearing before the Brexit select committee in parliament where he admitted Brexit impact assessments have not been carried out
‘Are you actually telling us that the Government hadn’t at that point – and still hasn’t – undertaken the assessment?’
Mr Benn asked him: ‘Doesn’t it strike you as rather strange that the Government undertakes impact assessments of all sorts of things all the time, but on the most fundamental change that we are facing as a country, you’ve just told us that the Government hasn’t undertaken any impact assessments at all on the implications for various parts of the economy?’
Mr Davis last week gave the committee 850 pages of what he terms ‘sectoral analyses’, looking at the condition of various parts of the UK economy and their current involvement in the EU market but making no forecasts on the likely impact of Brexit.
MPs complained that the material had been heavily edited by officials before being released to them, with some suggesting the Brexit Secretary could be in contempt of Parliament for failing to respond adequately to its demand.