MPs have demanded to be given details of the government’s plans for post-Brexit trade tariffs after Sky News revealed they would be cut sharply if there is no deal.
The Department for International Trade (DIT) intends to cut 80-90% of all tariffs imposed on imported goods, according to Whitehall sources.
Plans will be outlined if Theresa May fails to win backing for her EU withdrawal deal in the Commons – and represent a bombshell for many manufacturers and farmers.
Nicky Morgan, chair of the Treasury select committee, has written to Chancellor Philip Hammond, asking him to confirm that this is the government’s policy and demanding an update on its economic analysis reflecting different tariff scenarios.
She said it was “crucial” that members have the information prior to next week’s meaningful vote on Mrs May’s Brexit deal.
Earlier, international trade secretary Liam Fox told another Commons committee that he personally felt it would be “beneficial” for proposed tariff rates to be published before the vote – but that it was for the Treasury to decide on the timing.
Dr Fox said: “The government will set out what it believes to be the correct tariffs if indeed we get to a no-deal scenario.”
Tariffs protect UK domestic producers from overseas competitors and government sources say the 10-20% of sensitive items which will retain their protection under the plans include cars, beef, lamb, dairy, and some lines of textiles.
But the vast majority – including those on the component parts used to make cars, many finished food products, and some farm produce including cereals – will be eliminated entirely.
The radical blueprint, which has been agreed by the Cabinet, is intended both to keep prices in the shops from increasing dramatically and to signal the UK will remain an open and liberal economy even after leaving the EU.
But it is likely to lead to a fierce reaction among producers since the abolition of tariffs may make their businesses unsustainable.
Mrs Morgan said: “This is likely to have a significant impact on different business sectors and regions in the UK economy.”
She said MPs voting on the Brexit deal should do so “with as much information as possible”.
“At present, MPs are expected to vote blindly next week without this information,” she added.
A government spokesperson responded: “Our priority is securing a deal with the European Union as this will avoid disruption to our global trading relationships.
“If we leave the European Union without an agreement, our tariffs will need to strike a balance between protecting consumers and businesses from possible price rises and avoiding the exposure of sensitive industries to competition.
“We will communicate a decision on what is market sensitive information to stakeholders and the public as soon as possible.”