Sajid Javid rejected calls for an impact assessment of the Brexit deal, saying there was no need for the government to publish any formal evaluation of the deal before parliament votes on Saturday.
Speaking to journalists on the margins of the IMF annual meetings in Washington, the chancellor insisted the deal would be “good for the economy” but refused to lay out his view of the costs and the benefits of the deal.
In a whistle-stop visit to Washington, Mr Javid also made it clear he would propose borrowing significantly more in his Budget saying this was prudent because he expected interest rates to remain low for a long period.
On Thursday, a cross-party group of MPs wrote to the chancellor, demanding an impact assessment of the Brexit deal, saying that a failure to produce one for parliament “would be incomprehensibly irresponsible”.
But Mr Javid was unmoved. “I see no need for a new impact assessment,” he said. He accepted the impact assessment produced by the government in November 2018, which modelled a number of scenarios including a free-trade agreement similar to that envisaged by the Brexit deal was “still out there” and “anyone can look it up”.
He said the deal would make it easier to complete trade deals with other countries than the agreement signed by Theresa May, but refused to be drawn on the costs, outlined in the government’s existing impact assessment of filling in customs declarations, checks on the origin of goods and other behind the border checks.
He refused to endorse HM Revenue & Custom’s estimate that filling in customs declarations alone would cost £15bn a year for companies to complete, but accepted new frictions between UK and EU trade would be created by the deal.
“We want to keep [new trade frictions] to the absolute minimum and have the most frictionless trade we possibly can,” he said.
Mr Javid said the deal was “good for the economy” but added that even if there were costs, it was “good for the fabric of our democracy” in getting Brexit agreed. He said that finance ministers he had met in Washington had welcomed the agreement because it would help bring to an end one of the big uncertainties hanging over the global economy.
On the UK economy, Mr Javid made it clear that he had ambitious plans to increase public investment spending in the Budget on 6 November and that would mean tearing up the current fiscal rules, seeking to keep the budget deficit to 2 per cent of national income, an ambition to reduce that to zero and maintaining a falling burden of public debt.
“Fiscal discipline is critical and something that has always been important to me, but that doesn’t mean once you set fiscal rules they have to exist forever,” Mr Javid said.
“The big thing that has changed in the last few years is the fact that we have these record-low interest rates that I believe will be low for a long time.”
He said negative real and nominal interest rates were a very unusual situation. “I traded the bond markets for 20 years and have never seen anything like this.”
He refused to be drawn on how much extra debt he would like to take on to the public books, but indicated it would be significant. “When I publish my Budget, there will be a strong fiscal anchor, but one that does allow the country to take advantage of very low interest rates on public debt for longer-term productive investment to enhance the growth prospects of our country.”
