Brexit: Special Northern Ireland terms could have ‘unravelled’ the UK

The Brexit Secretary also revealed there were “no systematic impact assessments” carried out on individual sectors of the economy, leading to claims he misled parliament by suggesting 58 such studies have been carried out.

However, he escaped the threat of possible censure for contempt of parliament after MPs on the Commons exiting the EU committee split on whether Mr Davis had complied with a formal request to produce the assessments.

Brexit Secretary David Davis admits the Government have made no formal impact assessment of the UK leaving the EU. Picture: Parliament TV

The committee’s ten Conservative MPs and one DUP member backed the minister, while all eight opposition MPs called for Mr Davis to face proceedings that could have seen him suspended from parliament.

MPs had demanded access to the studies and were this week permitted to view over 800 pages of redacted material in a secure reading room in the House of Commons, but have voiced disappointment at the quality of the work.

MPs have been told by the Chancellor that the Cabinet has yet to discuss the decision to take the UK out of the single market and customs union, leading to accusations that the government does not know what kind of Brexit deal it is seeking.

It came as Theresa May scrambled to put together a compromise on the status of the Irish border after Brexit, speaking to DUP leader Arlene Foster and Ireland’s Taoiseach Leo Varadkar in a bid to revive an agreement that was torpedoed by the government’s Unionist allies on Monday.

Speaking to the committee, Mr Davis said his department had not carried out any impact statements because the change to the UK economy caused by Brexit would be on the same scale as the 2008 financial crash, making their usefulness “near zero”.

The Brexit Secretary told MPs as early as last December that his department was “in the midst of carrying out about 57 sets of analyses” on different parts of the economy. And in October, he told the Brexit committee that the Prime Minister had read “summary outcomes” of impact assessments, which he said went into “excruciating detail”.

But yesterday he told MPs that “no systematic impact assessments” had in fact been carried out. Mr Davis told the committee: “I’m not a fan of economic models because they have all proven wrong.

“When you have a paradigm change – as happened in 2008 with the financial crisis – all the models were wrong.

“Similarly, what we are dealing with here in every outcome – whether it is a free trade agreement, whether it is a WTO outcome or whether it is something between that on the spectrum – it is a paradigm change. We know not the size, but the order of magnitude of the impact.”

He told the committee he had tried to provide “the closest we could” to what the House of Commons had demanded, subject to his responsibility not to release information which was commercially secret, market sensitive or liable to undermine the UK’s negotiating position.

SNP MP Joanna Cherry, who sits on the Brexit committee, claimed Mr Davis was guilty of “irresponsibility or incompetence”.

“The revelation from the Brexit Secretary that the UK government has not conducted a single economic impact assessment on the impact of Brexit on the British economy is simply staggering and, if accurate, constitutes a serious dereliction of duty,” Ms Cherry said.

“Just last month, the UK government had to be dragged kicking and screaming before parliament to disclose their impact assessments.

“The UK government did not oppose the motion and the House unanimously passed the motion which the Speaker ruled to be binding. Now we are being told by the Brexit Secretary himself that these impact assessments do not exist.

“The Brexit Secretary is either guilty of equivocation or irresponsibility and incompetence.”

The Labour chairman of the committee, Hilary Benn, said it was “quite extraordinary” that no assessment was made of the impact of leaving the customs union “given the momentous nature of that decision”.

“You have said there are no impact assessments,” said Mr Benn. “You were hoping that, at the October (European) Council, the door would be open to phase two of the negotiations, where the question would be asked ‘What does the UK government want?’

“Are you actually telling us that the government hadn’t at that point – and still hasn’t – undertaken the assessment?”

Responding to a call from another SNP MP, Pete Wishart, for Mr Davis to face censure for contempt of parliament, Speaker John Bercow said he would consider any complaint submitted by Mr Benn.

The former Liberal Democrat leader Tim Farron claimed the Brexit Secretary was “writing the government’s Brexit strategy on the back of a fag packet” and called on him to resign.

“He has misled parliament and under his leadership the Brexit department has turned incompetence into an art form,” Mr Farron said. “I am not one to call for ministerial resignations every two minutes and I’ve nothing against David Davis as a person but it is now clear he deceived MPs.”

Giving evidence to another committee of MPs, the Chancellor admitted the cabinet had yet to formally discuss its preferred “end state position” for its relationship with the EU.

He told the Commons Treasury select committee: “Logically that will happen once we have confirmation that we have reached ‘sufficient progress’ and are going to begin the phase two process with the EU.”

Mr Hammond also said the UK would pay a Brexit “divorce bill” of up to £50 billion regardless of whether a trade deal is agreed, saying it was “inconceivable that we would walk away from obligations”.

David Davis faces calls to quit as he admits no Brexit analysis