EU damaging UK interests planning for 'no deal' Brexit, Davis says

David Davis has complained that the European Union is damaging British interests with its planning for a "no deal" Brexit.

In a letter to Theresa May, the Brexit Secretary said he would urge the EU to drop measures and guidance that could require UK companies to relocate to Europe or risk contracts being terminated in the event of no deal.

But Scottish First Minister Nicola Sturgeon described Mr Davis's "moaning" as "extraordinary" given the Government has set aside £3.7 billion to prepare to leave the EU without an agreement, and has repeatedly stated that "no deal is better than a bad deal".

Mr Davis told the Prime Minister he had sought legal advice but that the chances of a successful challenge against the measures were "low" and could be "high risk politically and financially".

He said he would urge the European Commission's Brexit taskforce to withdraw the statements made so far, in light of the deal reached in December to begin trade negotiations.

But Ms Sturgeon tweeted: "This letter is extraordinary. A govt intent on leaving EU & continually talking about prospect of 'no deal' moaning about EU preparing to treat UK as a non member and for the possibility of 'no deal'. Unbelievable - or rather, increasingly believable from this inept UK government".

In the letter obtained by the Financial Times, Mr Davis warns Mrs May that EU agencies have issued guidance to businesses stating that the UK will become a "third country" after Brexit in March 2019, with no reference to a future trade deal sought by both sides.

The guidance says "compliance activity", such as quality control of goods or medicines before they are released into the single market, "would need to be based in the EU or EEA (European Economic Area)" after Brexit.

The Commission has also issued "unilateral" statements on company law, civil justice and private international law, transport, and the breeding transport and protection of live animals which do not take into account a transition period or trade deal, he said.

Mr Davis described the moves as as "potential breaches of the UK's rights as a member state" of the EU and insisted "we cannot let these actions go unchallenged".

As well as urging the commission to withdraw its statements, the Brexit Secretary said he would provide reassurance to British businesses.

It came as SNP Westminster leader Ian Blackford hosted a cross-party summit in Parliament on retaining UK membership of the single market and customs union after Brexit.

Liberal Democrat Brexit spokesman Tom Brake criticised Labour leader Jeremy Corbyn for snubbing the summit, which was also attended by the Green Party and Plaid Cymru.

Mr Brake tweeted: "Oh Jeremy Corbyn where are you when it comes to fighting to stay in the Single Market and Customs Union? Represented by an empty chair!"

But a Labour source said: "The single market is not a membership club that can be joined so we seek, through negotiation, to retain the benefits of the single market.”

"As he (Mr Corbyn) said in his letter back to Ian Blackford, the summit rests on the falsehood that the single market is a membership organisation which you can join, which it is not.”

"Our approach for a jobs-first Brexit, which involves retaining the benefits of the single market, is through negotiation with the EU."

Commenting on Mr Davis's letter, Labour former minister Pat McFadden, who supports the Open Britain campaign for close ties with the EU, said: "The Government is implicitly threatening a no-deal scenario.

"It should come as no surprise that the EU is also preparing for this possibility.

"It seems extraordinary that the Government is exercised about the EU preparing for a no deal scenario when it has set aside £3 billion in its most recent Budget to do exactly the same thing."

Lib Dem leader Sir Vince Cable urged Labour to back single market membership.

After the meeting, he said: "This is a good, positive step to parliamentary co-ordination between opposition parties against the Conservative Brexit.”

"There are four parties here who are putting their political differences to one side for the good of the country.

"I would urge the Labour leadership to do the same and get involved - their membership and most of their MPs would like them to fight to remain in the single market and customs union."