‘No-deal Brexit is what happens when things go wrong but we need to be prepared’, says IEA's Director of International Trade Unit

‘No-deal Brexit is what happens when things go wrong but we need to be prepared’, says IEA's Director of International Trade Unit

Wednesday, December 19, 2018

Institute of Economic Affairs' Shanker Singham has said that “no-deal is what happens when things go wrong” but that the UK must still “prepare for it”.

Mr Singham, Director of the IEA’s International Trade and Competition Unit, told talkRADIO’s Julia Hartley-Brewer: “Everybody wants a deal; the EU want a deal because they have major exports into the UK and the UK wants a deal as well.

“What we believe makes sense is that you put your best deal on the table, knowing that they have a need to continue exports flowing into our markets.

“You then show strength and you don’t blink. The way you show strength is to make sure that you are ready for all of the contingencies.

“One of those is that they may put politics above commercial reasons and then we may be in a no-deal situation.

“No deal is not something people want to have. No deal is what happens when things go wrong and we must be prepared for it.”

Theresa May’s cabinet has allocated £2bn to ministries to set aside in case the UK leaves on 29 March without MPs having accepted any deal.

Letters will also be sent to 140,000 firms with updates about what to do in that case and 3,500 troops will be put on standby to help government departments.

 

No-deal planning 'is an important negotiating tactic' 

Mr Singham added that the Government should be “public” about the extent of their no-deal Brexit planning.

“The Government so far has probably done more no-deal planning than has been suggested. They need to be public about what they have done,” he said.

“They also need to accelerate the plans that they have been put in place. They need to spend the money that has been put aside some time ago for no-deal planning.”

He added: “It is a very important negotiating tactic to make sure that you are ready for all contingencies and the other side knows you are ready for all contingencies.

“If the EU knows that we are taking serious and credible steps to be ready for no deal, it is more likely that we will get a deal.”