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MPs at odds over claim no deal is better than bad deal on Brexit

Theresa May's claim that "no deal" on post-Brexit trade with the EU is better than a bad deal is "unsubstantiated", a parliamentary committee has warned.

The House of Commons Exiting The EU Committee called on the Government to conduct and publish a thorough assessment of the consequences of crashing out of the EU without agreement on future trade relations.

It said that, in these circumstances, Parliament must be given a vote on whether to accept the Prime Minister's decision to leave without a deal at the end of the two-year Brexit negotiation process.

The document split the cross-party committee, with six pro-Brexit MPs voting against its publication amid reports of a walkout by members who regarded it as "too gloomy".

Five Conservatives, including former ministers John Whittingdale and Dominic Raab, and Democratic Unionist Sammy Wilson voted against the report, but were outnumbered by 10 Labour, Tory, Liberal Democrat, SNP and SDLP committee members, all of whom backed Remain in last year's referendum.

Mr Whittingdale told the Press Association the report was "unduly negative" and had "very much concentrated on the problems without really recognising the opportunities" of Brexit.

Mr Raab said: "The report was rushed, skewed and partisan. After two reports that had strong support, it's regrettable that this one split the committee.

"That undermines its credibility and influence, but I hope and expect the committee will learn the right lessons as we move forward."

The committee last month heard Brexit Secretary David Davis admit no assessment had been made of the cost of leaving the EU without a trade deal and falling back on World Trade Organisation tariffs.

"Without an economic assessment of 'no deal' having been done and without evidence that steps are being taken to mitigate what would be the damaging effect of such an outcome, the Government's assertion that 'no deal is better than a bad deal', is unsubstantiated," the report warned.

It backed the finding of a previous report by the Commons Foreign Affairs Committee that a no deal scenario "represents a very destructive outcome leading to mutually assured damage for the EU and the UK".

Parliament and the public have a "right to the maximum possible information" about the impact of failing to secure a deal, and the Government should conduct "a thorough assessment of the economic, legal and other implications" of all options under consideration, the report said.

The committee challenged Mrs May's insistence that she will offer only a "take it or leave it" vote to Parliament on any deal she achieves, stating it was "essential" MPs also get a vote "in the event that there is no deal".

Committee chairman Hilary Benn said: "Leaving the EU without a future trade deal and in doing so defaulting to World Trade Organisation rules is no less an important decision for the UK's economic future than the terms of any future Free Trade Agreement between the UK and the EU.

"It is therefore essential that such a step is not taken without Parliament having a vote on the matter."

The committee called on the UK Government and EU to reach a "stand-alone and separate" deal on the rights of expatriate citizens as soon as negotiations start, warning it would be "unconscionable" to make three million EU nationals in the UK and one million Britons living on the continent wait until the end of the Article 50 process for certainty about their status.

It urged ministers to seek a "passporting"-style agreement to allow cross-border financial services following Brexit, and said the Government should agree the phased implementation of new arrangements for the sector.

The committee said legislation implementing the UK's withdrawal from the EU is likely to require the legislative consent of devolved administrations in Scotland, Wales and Northern Ireland, which should be given enough time to conduct appropriate scrutiny.

Following complaints from devolved administrations of insufficient consultation, the committee urged the UK Government to establish a more effective process for engaging with them and to respond formally to the options papers they have produced.

Lib Dem committee member Alistair Carmichael said the the report was "a devastating critique of the shambles that is the Conservative Brexit strategy".

He said: "On point after point, the committee makes clear that the Government is wrong, such as on their insistence that a trade deal can be secured in time to avoid a cliff-edge Brexit, and on the Government's singular inability to explain even in general terms how it would replace the customs union."

But Mr Davis said "a responsible government should prepare for all potential outcomes", adding: "We are clear that no deal is not what we want or expect, but that it would be better than a deal which sought to punish the UK."

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