During the session (at 10:35:47), Treasury Committee member Wes Streeting MP asked:
“The Government has produced a Tax Information and Impact Note (TIIN) for no-deal tariffs but one thing that was interestingly omitted was the Exchequer impact of the proposals. Is this because the Treasury doesn’t know or you don’t want to tell us?”
In response, Clare Lombardelli, Director General, Chief Economic Adviser, HM Treasury, replied:
“The question on the Exchequer impact […] it will be for the OBR [Office for Budget Responsibility] to work that through when this becomes something that they need to think about. It’s hard to know […] in the sense of predicting the sort of short run impact of those tariffs with any certainty is quite difficult. This is fairly […] unprecedented territory so putting a number on that will be quite a challenge. Because the OBR’s forecast was on the basis of getting a deal […] they didn’t have to do this as part of that process because these tariffs only apply in a no-deal world. But should that happen, there would then be a process in which they in discussion with us and particularly HMRC would go through the process of looking at the costings of that, what the impact is likely to be, and so on and so forth. It’s basically an unknown at this stage.
Mr Streeting also asked (at 10:37:20):
“Just to be clear about this because this could potentially kind of hit reality next Friday so this isn't a distant point. This is imminent and worryingly possible. So for all of the reasons you outlined, which sounded perfectly reasonable from the point of view that people have to do the number crunching, the TIIN has been issued without any Treasury numbers on the impact?”
To which Ms Lombardelli replied:
“Yes, that is true.”
Commenting on this, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee said:
“A no-deal Brexit could be nine days away. It’s concerning, therefore, that the Government appears to be making unprecedented choices about the UK’s future while a key element in its own analysis remains “unknown”.
“Whilst the Government has said that its tariff plans are only intended to be short-term, 12 months is plenty of time to affect a business permanently.
“It is no surprise that businesses and the country feel that they are facing a very uncertain future even if there is an extension to the Article 50 period.”
Wes Streeting MP said:
“It is clear that the UK faces the serious prospect of leaving the European Union with no deal and no idea about what the consequences will be for businesses and the jobs that people rely upon. This is extraordinary and without precedent.”
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