Rachel Reeves: It's not too late to ditch Theresa May's shabby, fatally flawed Brexit option that will damage our economy for decades to come

THE grim scenario painted this week by the Bank of England's Governor Mark Carney of a 'no deal' Brexit is truly terrifying.

By The Newsroom Saturday, 1st December 2018, 1:42 am

Should Bank of England governor Mark Carney be heeded over Brexit?

In the event of a disorderly Brexit, the economy could shrink by eight per cent, the rates of unemployment and inflation could both rocket and the pound might crash by 25 per cent.

The Governor’s ‘worst case’ scenario could see more damage to Britain’s economy than the impact of the 2008 global financial crisis.

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But the chilling warning from the Bank of England, where I worked as an economist before becoming an MP, is far from unique.

Theresa May refuses to set out her Brexit plan B if her strategy is voted down by MPs on December 11.

On the same day, the Government issued its own warning about the potential impact of a no-deal Brexit.

The Treasury admitted that in all scenarios the UK would be poorer 15 years after we leave the EU than we would have been without Brexit.

The PM is now – let’s be clear – asking for MPs to vote for a deal that she knows and we know will make our constituents poorer.

Under Theresa May’s deal, our Gross Domestic Product could take a hit of up to £100bn over the next 15 years.

Graeme Bandeira's latest cartoon.

Every person would be £1,100 worse-off every year. Boris Johnson and Nigel Farage did not slap those figures on the side of a bus during the referendum campaign.

Even the Chancellor Philip Hammond was forced to admit our economy will be smaller – that’s if his boss Theresa May’s Brexit deal gets the support of Parliament.

I challenged the PM in the House of Commons this week to outline what plans the Government had if her deal flounders.

All the PM could say was that her deal was “good for the United Kingdom” – on the same day the Treasury gave a starkly different view.

And it’s not just economists who hold that view. In my role as chair of the Business, Energy and Industrial Strategy Committee in the House of Commons, I heard yet more evidence from business leaders this week about their worries for the future.

They are desperate to avoid a no-deal Brexit, but they also prefer the deal the UK currently enjoys with the EU far more than the option the Government has put before them.

One business leader warned that leaving the EU and the single market was not as simple as pulling out a three-pin plug.

Ian Rayson of Nestlé UK told my committee: “It is much more like ripping all the wires out of a huge mainframe and then we will all be standing there with all these wires.

“It will take an awful lot of time to be able to rewire us into a different trading system.”

We also heard from the Food and Drink Federation that warehouses were almost full to capacity as worried companies stockpile goods in the event of a cliff-edge Brexit.

Some foods and medicines have very limited shelf lives so the risks of a chaotic no deal are becoming more alarming by the day.

My committee heard how some warehouses were now turning away food suppliers because their premises are fully booked for months ahead.

The aerospace industry couldn’t guarantee that there wouldn’t be disruption to flights and Airbus revealed they had spent 15 million euros on contingency planning which could have been invested in research, technology and skills training.

In the past couple of days, my committee also visited Northern Ireland to see at first hand what Brexit will mean for the Irish border and trade on the island of Ireland.

We talked to businesses on the border in Newry to see how their trade benefits from the current frictionless border and how their trade would be disrupted by any additional regulatory checks they could face under Brexit if they are forced to live with a hard border - or with the PM’s deal which does not and cannot guarantee our frictionless trade.

It is well over two years since the Brexit referendum and now, just as back in 2016, the Government has no viable blueprint for a strong and successful UK economy outside the EU.

Let’s be clear about one thing: Theresa May’s Brexit deal is not, as she and Downing Street claim, the best deal on offer. It is the only deal the PM has put on offer.

However, there is an alternative to the chaos and economic damage offered by the Prime Minister’s deal and a no deal Brexit.

If, as looks very likely, the Government’s Brexit deal gets voted down, what happens next?

It is my view that the PM should present the public with a concrete choice between the PM’s deal as well as the option of staying in the EU now we can see what Brexit really entails,.

The deal the PM has put on the table is a shabby, fatally flawed option that will badly damage our economy for decades to come, with all the consequences for jobs, prices and investment. The sooner it is ditched, the better.