UK government made no analysis of Brexit’s economic impact

Parliamentary committee warned of a profound shift in the way the economy operates, similar in scale to the 2008 financial crisis.

LONDON — The UK official shepherding Britain’s departure from the EU acknowledged the government has made no formal assessments of the economic impact of leaving the 28-nation bloc.

Brexit Secretary David Davis told a parliamentary committee the nation should be prepared for a profound shift in the way the economy operates on a scale similar to that of the 2008 financial crisis.

He says that since Britain must prepare for a “paradigm change,” in the economy, any assessment in the automotive, aerospace financial services or other sectors would fail to be “informative.”

The House of Commons’ Brexit committee’s chair, Hilary Benn, described the decision as “rather strange” given the momentous decisions at hand and since authorities wish to start renegotiating Britain’s trade relations with the rest of Europe within weeks.

“You have said there are no impact assessments,” Benn said. “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?’

“Are you actually telling us that the government hadn’t at that point – and still hasn’t – undertaken the assessment?” Benn asked.

Davis told the committee he didn’t need a formal impact assessment.

“I’m not a fan of economic models because they have all proven wrong,” Davis said. “When you have a paradigm change – as happened in 2008 with the financial crisis – all the models were wrong.”

Britain and the EU came close to agreeing on key divorce terms, including how to maintain an open Irish border after the UK – including Northern Ireland – leaves the EU.

But the agreement was scuttled at the last minute when the Democratic Unionist Party, which props up Prime Minister Theresa May’s minority government, warned it wouldn’t support a deal it saw as undermining Northern Ireland’s place in the UK.

Foreign Secretary Boris Johnson said that a solution to the issue “can only be discovered in the context of discussions on the end state of the UK’s relations with the rest of the EU.”

“We are going to take back control of our borders, of our laws and of UK cash contributions and that’s the way forward, and we will come up with a solution,” he added.

May was expected to hold talks with top EU officials later this week.

Britain and the EU have only days to clinch a deal on borders, Britain’s financial settlement with its EU partners and the rights of citizens hit by Brexit before a Dec. 14-15 EU summit that will decide whether Brexit talks can move on to future relations and trade.

The lack of progress so far has raised concerns that Britain may not have a deal by the time it officially leaves on March 29, 2019, and heightened fears that May’s government could collapse.

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