MPs warn over forthcoming Brexit negotiations

Failure to reach agreement in the forthcoming Brexit negotiations will be "very destructive" for both Britain and the European Union, MPs have warned.

With Theresa May set to trigger the start of Article 50 withdrawal process within days, the Commons Foreign Affairs Committee said there was real possibility the talks could end with no deal.

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

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

The Prime Minister has repeatedly said she would rather walk away without a settlement than agree to a "bad deal".

The committee said if all that was on the table was a demand from Brussels for a large lump sum payment with no offer of preferential trading arrangements, that might be the only option.

But given the impact on both sides, it said that it should be a "key national and EU interest" that such a situation was avoided.

"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," it said.

"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."

While the consequences of such failure were "largely predictable", the committee said there was no sign that ministers were giving it the level of consideration it deserved.

"The possibility of 'no deal' is real enough to justify planning for it. This is all the more urgent if the Government is serious in its assertion that it will walk away from a 'bad' deal," it said.

"Last year, we concluded that the previous government's decision not to instruct key departments to plan for a Leave vote in the EU referendum amounted to gross negligence.

"Making an equivalent mistake would constitute a serious dereliction of duty by the present administration."

The committee said requiring departments to set out plans to mitigate the risks involved in "no deal" would also strengthen the Government's negotiating hand by lending credibility to its threat to walk away from the table.

Committee chairman Crispin Blunt said: "The Government has repeatedly said that it will walk away from a 'bad' final deal.

"That makes preparing for 'no deal' all the more essential. The responsibility on the negotiators is substantial."

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'."