A NO-DEAL exit from the EU would pose a “fundamental risk” to the competitive of the British economy, the UK parliament’s Committee on Exiting the EU has warned. 

A report into the economic impact of no deal, published today, warns that a no-deal exit – a possibility seen as increasing likely given the hardline positions taken by Boris Johnson and Jeremy Hunt in the race to succeed Theresa May as Conservative Party leader – would “put many jobs and livelihoods at risk”.

The committee, which is chaired by Labour MP Hilary Benn, warns that a “managed no deal” should not be the policy of any “responsible government”.

Speaking to RTÉ’s Morning Ireland programme today, Benn questioned the logic of a no-deal departure from the EU, which he said could pose “catastrophic” damage to areas such as farming. 

“No-deal cannot represent the end state of our future relationship with the EU,” he said. 

Yesterday’s House of Commons vote, which saw MPs vote to block any future attempt to suspend parliament to push through a no-deal Brexit, was pointed to by Benn as a warning to the next prime minister that whatever he wants to do “he’s going to have to go through parliament”. 

The report contains stark warnings for various sectors of the UK economy, including the services industry, the motor sector and farming. 

In terms of business services, the committee warns that “UK’s position as the clear front-runner destination for venture capital investment in technology firms—an area seen as a future growth sector—will be jeopardised by a no deal exit”, while also noting that the lack of future certainty on the UK-EU relationship is preventing many smaller businesses from preparing for no-deal. 

In terms of farming, the report warns that food supplies could be interrupted under a no-deal scenario and could pose “disastrous” consequences for farmers. 

Boris Johnson – the likely winner of the Conservative Party leadership race – has said he will take the UK out of the EU by 31 October whether or not a deal is reached.

The report also questions the idea that the UK could rely on Article 24 of General Agreement on Tariffs and Trade (GATT), which Johnson has suggested could be used to maintain free trade in the event of no-deal. 

“Article XXIV is the GATT provision that allows for an interim agreement between two parties in anticipation of a free trade agreement or customs union.

“It requires an agreement between the two parties, a plan as to how the end state will be reached, and for this agreement to be notified to all parties to the WTO. By definition, leaving without a deal means there is no agreement. Article XXIV does not provide a means to mitigate the risks to EU-UK trade in the event of a no deal exit,” the report finds.

Earlier this month, Tánaiste Simon Coveney warned that a risk of no-deal was “significant” and would pose major challenges to the Irish economy. 

The committee’s report does reference the close economic relationship between Ireland and the UK. Discussing the agricultural links between Ireland and the UK, it states: “A no deal, non-cooperative relationship cannot be the desired end state for UK-EU economic relations. The closeness of the economic relationship is most evident in the agri-food sector on the island of Ireland.”

“Northern Irish milk products would no longer be certified to cross the border to be processed, putting the continued business of Northern Irish milk producers at risk,” the report warns.