EU damaging UK interests with plan for no-deal Brexit, says David Davis

David Davis has been accused of “extraordinary moaning” after attacking the EU for preparing for a no-deal Brexit while setting aside £3.7bn ready for the scenario himself.

In a letter to Theresa May, the Brexit secretary said he would urge the EU to drop measures and guidance that could require UK companies to relocate to Europe or risk contracts being terminated in the event of no deal.

But Scottish first minister Nicola Sturgeon described Mr Davis’ “moaning” as “extraordinary” given the government has set aside £3.7bn to prepare to leave the EU without an agreement, and has repeatedly stated that “no deal is better than a bad deal”.

Mr Davis told the prime minister he had sought legal advice but that the chances of a successful challenge against the measures were “low” and could be “high risk politically and financially”.

He said he would urge the European Commission’s Brexit taskforce to withdraw the statements made so far, in light of the deal reached in December to begin trade negotiations.

But Ms Sturgeon tweeted: “This letter is extraordinary. A govt intent on leaving EU & continually talking about prospect of ‘no deal’ moaning about EU preparing to treat UK as a non member and for the possibility of ‘no deal’. Unbelievable – or rather, increasingly believable from this inept UK government”.

This letter is extraordinary. A govt intent on leaving EU & continually talking about prospect of ‘no deal’ moaning about EU preparing to treat UK as a non member and for the possibility of ‘no deal’. Unbelievable – or rather, increasingly believable from this inept UK government https://t.co/47CFxS99B7

— Nicola Sturgeon (@NicolaSturgeon) January 9, 2018

In the letter obtained by the Financial Times, Mr Davis warns Mrs May that EU agencies have issued guidance to businesses stating that the UK will become a “third country” after Brexit in March 2019, with no reference to a future trade deal sought by both sides.

The guidance says “compliance activity”, such as quality control of goods or medicines before they are released into the single market, “would need to be based in the EU or EEA (European Economic Area)” after Brexit.

The Commission has also issued “unilateral” statements on company law, civil justice and private international law, transport, and the breeding transport and protection of live animals which do not take into account a transition period or trade deal, he said.

Mr Davis described the moves as as “potential breaches of the UK’s rights as a member state” of the EU and insisted “we cannot let these actions go unchallenged”.

As well as urging the commission to withdraw its statements, the Brexit secretary said he would provide reassurance to British businesses.

European Commission chief spokesman Margaritis Schinas told a daily Brussels briefing: “We are somehow surprised that the United Kingdom is surprised that we are preparing for a scenario announced by the UK government itself.

“After all, it was prime minister May herself who said in her Lancaster House speech in January 2017, and repeated in her Florence speech in September, that ‘no deal for Britain is better than a bad deal for Britain, it is right that the government should prepare for every eventuality’.

“So we take these words by the prime minister very seriously and it is therefore only natural that in this house we also prepare for every eventuality.”

Commenting on Mr Davis’ letter, Labour former minister Pat McFadden, who supports the Open Britain campaign for close ties with the EU, said: “The government is implicitly threatening a no-deal scenario.

“It should come as no surprise that the EU is also preparing for this possibility.

“It seems extraordinary that the government is exercised about the EU preparing for a no deal scenario when it has set aside £3bn in its most recent Budget to do exactly the same thing.”