MPs urge government to have 'no deal' Brexit plan

Failing to reach an agreement during Brexit negotiations will be "very destructive" for the EU and Britain, MPs have warned.

As Theresa May prepares to trigger Article 50 within days, the Commons Foreign Affairs Committee said there was a real possibility that talks could end with no deal.

But despite potentially grave consequences, the committee said it had seen no evidence of contingency planning.

It said ministers should ask all Whitehall departments to draw up "no deal" plans, warning that failure to prepare for the outcome would be a "serious dereliction of duty".

Mrs May has repeatedly said she would walk away without a settlement rather than a "bad deal", but the committee said if Brussels only demanded a lump sum payment and no preferential trading arrangements, that might be the only option.

Given the impact on both sides, it said it should be a "key national and EU interest" that the situation is avoided.

It said: "It is clear from our evidence that a complete breakdown in negotiations represents a very destructive outcome leading to mutually assured damage for the EU and the UK.

"Both sides would suffer economic losses and harm to their international reputations. Individuals and businesses in both the UK and EU could be subject to considerable personal uncertainty and legal confusion."

Brexit Secretary David Davis Credit: PA

A Department for Exiting the European Union spokesman said: "We enter these negotiations aiming for a positive new partnership with the EU, including a comprehensive agreement on free trade. We are confident we can achieve such an outcome and that it is in the interests of both sides.

"However, as the Secretary of State for Exiting the European Union has said, a responsible government should prepare for all potential outcomes.

"He briefed the Cabinet last month on the need to prepare not just for a negotiated settlement, but for the unlikely scenario in which no mutually satisfactory agreement can be reached."

Shadow foreign secretary Emily Thornberry said: "It was reckless of the Government to fail to plan for a Leave vote last year, and as this report shows, they are being just as reckless in their approach to the Article 50 negotiations, if not more so.

"All we have heard from the Government so far is that if there is no deal, they are prepared to 'break the British economic model'.

"There are some very serious issues highlighted in this report which must be addressed. It is completely inadequate to brush these questions off and claim what would happen without a deal is 'an exercise in guesswork'."