Nicky Morgan hits out at government over Brexit uncertainty

Thorn in Theresa May's side, Nicky Morgan - Credit: PA Archive/PA Images

Businesses face ‘pervasive uncertainty’ over Brexit, Tory rebel Nicky Morgan has said.

The Commons Treasury Committee chairwoman and former education secretary said firms needed more pragmatic guidance on what the long-term trade relationship between the UK and EU would be.

And she branded the government’s response to the committee’s report on the impact of Brexit ‘extraordinary’ as ministers called for businesses to ‘understand and explore’ the potential impact of regulatory changes triggered by withdrawal.

Morgan added firms could not be expected to ‘understand’ what would happen given the level of uncertainty.

She said: ‘Key questions remain unanswered and details are in short supply.

‘In this environment of pervasive uncertainty, it is extraordinary that the government – in its response to the committee’s report – is advising businesses to ‘understand’ and ‘explore potential impacts’ of ‘regulatory change’ arising from Brexit.

‘Firms can hardly begin to understand change until they know what it consists of. Brexit uncertainty for businesses still looms large.’

Morgan – a powerful backbencher determined to soften the government’s stance over Brexit – said that without clear information, companies would have to prepare for the ‘worst-case scenario’ of operating on World Trade Organisation (WTO) terms after Brexit.

‘In the absence of clarity, they will have no choice but to prepare for the one eventuality that they can understand – the worst-case scenario of a trade relationship based on WTO commitments,’ she said.

‘As the committee concluded, adaptation to ‘WTO rules’ could involve a ‘relocation of jobs and economic activity from the UK to the rest of the EU’.’

Morgan said the committee was pleased the government had largely accepted its overall framework for transitional arrangements, but things needed to be put in place.

‘Businesses are now crying out for the certainty of having a transition period secured.

‘But, as the draft texts published by both sides show, transition is not yet a done deal. It is vital that remaining disagreements over the duration and governance of the transition period are resolved quickly.

‘A failure to reach agreement in the March European Council would be economically damaging and dramatically diminish the value of whatever is eventually negotiated.’

As part of its response to the committee’s report on Brexit arrangements, the government said: ‘As with any regulatory change businesses are advised to understand how these may affect their business and explore potential impacts.’