Open Britain Background Briefing: The Brexit Impact Assessments

Overview

In evidence to the Exiting the EU Select Committee this morning, David Davis said the Government has not carried out any sectoral assessments of the impact of Brexit on the economy – despite the fact that both he and his junior ministers have repeatedly said in the past that they have. 

This briefing documents every key intervention made by ministers about the sectoral analyses, from September 2016 through to today. It also includes an overview of the 58 sectors that the covered claims to have assessed, and some views from key industries about the likely impact of Brexit.

Top lines

  • People have every right to know what is going to happen in their industries and their workplaces because of Brexit.
  • For a year David Davis has been saying this work is underway. Then he said the reports were completed. Then he said they couldn’t be shared. Now he says not just that the reports don’t exist but that the work hasn’t yet started.
  • This is the most important change for our country for generations and people need confidence that the Government is prepared. Instead it appears they are taking the biggest gamble with our economy and risking the prosperity of businesses and families across the country.
  • Parliament and the public need clarity and complete honesty from ministers. Brexit is too important to be dealt with in this way.
  • If the Government has genuinely not done assessments of the impact of leaving the Single Market and Customs Union or the impact of no deal on the economy, it is an utter dereliction of duty.

What David Davis said today

Hilary Benn MP: So, just to be clear, has the government undertaken any impact assessments on the implications of leaving the EU for different sectors [of the economy]

David Davis MP: Not in sectors. The Treasury, of course, has got an OBR forecast which has an implication, although even that is pretty crude ... There is no systematic impact assessment.

Benn: So the answer to the question is no. So the government hasn’t undertaken any impact assessments of implications of leaving the EU for different sectors of the British economy.

Davis: No.

Benn: So there isn’t one, for example, on the automatic sector?

Davis: Not that I’m aware of, no.

Benn: Is there one on aerospace?

Davis: Not that I’m aware of.

Benn: One on financial services?

Davis: I think the answer is going to be no to all of them.

What Ministers used to say

September 2016:

Adam Holloway MP: What sort of jobs are your squadron group of 180 people doing?
David Davis MP: A variety of things. First, there is the sectoral analysis: they are working through about 50 cross-cutting sectors—what is going to happen to them, what the problems of those industrial groups are, and so on.
David Davis MP, Evidence to the Foreign Affairs Committee, 13 Sept 2016[1]

“My Lords, we are looking at the British economy, sector by sector, to see the impact that Brexit might have on it and taking a sounding of views right across the economy. That seems to me to be the perfectly logical way to approach this, acting purely in the national interest.”
Lord Bridges, House of Lords, 14 Sept 2016[2]

October 2016:
"It is an attempt to try to get this into a manageable format so that we can analyse what Brexit might mean for those particular sectors."

Lord Bridges, Evidence to the EU External Affairs Sub-Committee, 13 October 2016[3]

“The Government continue to undertake a wide range of analysis covering all parts of the UK to inform the UK’s position for the upcoming negotiation with the European partners.”
David Davis MP, House of Commons, 20 October 2016[4]

“…my Department is involved in various analyses. We are analysing over 50 sectors and that includes, of course, engaging very closely with other Government departments so that we can establish what we consider to be the best possible terms for departure. That, of course, will inform our negotiation once it starts.”
David Jones MP, Evidence to European Scrutiny Committee, 26 October 2016[5]

December 2016:
“The Department is carrying out a programme of work to analyse the economic significance and trade dynamics of more than 50 sectors of the economy. That includes analysis at both national and regional levels.”
David Jones MP, House of Commons, 1 December 2016[6]

“We are in the midst of carrying out about 57 sets of analyses, each of which has implications for individual parts of 85% of the economy. Some of those are still to be concluded.”
David Davis MP, Evidence to the Exiting the EU Select Committee, 14 December 2016[7]

January 2017:
“As you are aware, my department is conducting an extensive programme of consultation with more than 50 sectors. It will not surprise you to hear that the City of London is at the very top of that list. That consultation continues.”
David Jones MP, Evidence to the EU Select Committee, 10 January 2017[8]

“Our Department, working with officials across government, continues to undertake a wide range of analysis, covering the entirety of the UK economy and our trading relationships with the EU. We are looking at more than 50 sectors, as well as cross-cutting regulatory issues.”
Robin Walker MP, DExEU Questions, 26 January 2017[9]

February 2017:

“We have structured our approach by five broad sectors covering the breadth of the UK economy: goods; agriculture, food and fisheries; services; financial services; and energy, transport and communications networks, as well as areas of crosscutting regulation. Within this, our stakeholder engagement and analysis covers over 50 specific sectors.”[10]

Government Brexit White Paper, February 2017 

“We continue to analyse the impact of our exit across the breadth of the UK economy, covering more than 50 sectors —I think it was 58 at the last count—to shape our negotiating position.”[11]

David Davis, House of Commons, 2 February 2017

March 2017:

“That is why my department has been carrying out a huge amount of work over the last seven or eight months, engaging with over 50 separate sectors of the economy, many of which have cross-cutting issues that need to be addressed, to ensure we are in a position to plan for whatever may eventually take place.”[12]

David Jones, Evidence to the European Scrutiny Committee, 20 March 2017 

April 2017:
“The Department has carried out an in-depth assessment right across 50 sectors of the economy. We have made it clear, however, that it is not in the national interest for us to produce a running commentary on the way in which we are developing our negotiating position, and that will remain the case.”[13]

David Jones, House of Commons, 27 April 2017

May 2017:

“DExEU has conducted analysis of over 50 sectors of the economy”[14]

David Jones, letter to Green MEP Molly Scot-Cato, 23 May 2017

June 2017:

“That data’s being gathered, we’ve got 50, nearly 60 sector analyses already done, we’ve got planning work going on in the customs, we’ve got planning work going on 22 other issues which are critical, 127 all told.”[15]

David Davis MP, BBC Andrew Marr Show, 25 June 2016

“The Department for Exiting the European Union, working with officials across Government, continues to undertake a wide range of analysis to support our negotiations. Our work covers the breadth of the UK economy, and we are looking in detail at more than 50 sectors as well as areas of cross-cutting regulation.”[16]

Robin Walker, answer to a written parliamentary question, 26 June 2017

October 2017:

“Well, she’ll [Theresa May] know the summary outcomes of them. She won’t necessarily have read every single one, they are in excruciating detail.”[17]

David Davis, evidence to Brexit select committee, 26 October 2017

November 2017:

“Given the generosity of approach that he [Keir Starmer] has taken in that regard we will not be opposing this motion. But I do say that we need to look at the content of this analysis. I point out that there has been some misunderstanding about what this sectoral analysis actually is. As he quoted the Secretary of State’s comments before the Lords EU Committee yesterday, it is not a series of 58 economic impact assessments.”[18]

Robin Walker, House of Commons, 1 November 2017

“The Government hold a wide range of information across a wide range of documents. The information is provided by Departments and collated by my Department, but what it does not comprise, and has never comprised, is quantitative forecasts of impact on those sectors.”[19]

Steve Baker, House of Commons, 7 November 2017

“Since the start of this process, the Government has been clear that there are not, nor have there ever been, a series of discrete impact assessments arising out of our analysis of the 58 sectors.”[20]

David Davis, letter to the Brexit select committee, 27 November 2017

December 2017:

“There's nothing...there's no such systematic impact assessments that I'm aware of.”[21]

David Davis, evidence to the Brexit select committee, 6 December 2017

The 58 sectors

At the end of October, the Department for Exiting the European Union released the full list of 58 sectors. Open Britain estimated at the time that the number of workers in these sectors is around 29 million, representing around 88% of the total UK workforce.

  • Advertising and marketing - 153,000 (workers)
  • Aerospace - 230,000
  • Agriculture, Animal Health and Food and Drink manufacturing - 850,000
  • Architecture - 91,200
  • Asset Management - 37,000
  • Audit and accounting - 342,000
  • Automotive - 814,000
  • Aviation - 960,000
  • Broadcasting - 77,900
  • Bus and coach transport - 250,000
  • Catering: retail and wholesale - 1,700,000
  • Chemicals - 105,000
  • Construction and Engineering - 2,900,000
  • Crafts - 300,000
  • Defence - 142,000
  • Design: product, graphic, and fashion design - 180,000
  • Electricity market, incl. renewables - 112,026
  • Electronics - 850,000
  • Environmental Services: waste - 357,200
  • Environmental Services: water - 357,200
  • Film, TV, video, radio and photography - 114,000
  • Fintech - 61,000
  • Fisheries - 11,800
  • Gambling - 106,678
  • Gas market - n/a
  • Higher Education - 410,130
  • Insurance and pensions - 315,000
  • IT, software, and computer services (incl. video games) - 1,400,000
  • Legal Services - 370,000
  • Life Sciences - 482,000
  • Machinery and equipment - n/a
  • Maritime/ports including marine equipment - 113,000
  • Market infrastructure (financial services) - n/a
  • Medical devices - 50,000
  • Medical services and social care - 3,000,000
  • Museums, galleries, and libraries - 55,000
  • Music, performing and visual arts - 84,470
  • Nuclear - 15,500
  • Oil and fossil fuel production (including gas) - 375,000
  • Payment services and systems - n/a
  • Pharmaceuticals - 53,000
  • Post - 161,136
  • Professional services - 1,100,000
  • Publishing 209,000
  • Rail including manufacturing 190,000
  • Real Estate - 1,000,000
  • Retail - 2,700,000
  • Retail and corporate banking - 421,000
  • Road haulage and logistics - 1,620,000
  • Space - 38,522
  • Steel and other metals/commodities - 230,000
  • Technology (ICT) - 1,500,000
  • Telecommunications - 1,500,000
  • Textiles and Clothing - 39,000
  • Tourism - 2,970,000
  • Wholesale markets and investment banking - 421,000

Impact of Brexit on key sectors


Automotive:

  • 814,000 people employed
  • SMMT analysis suggests that EU tariffs on cars alone could add at least an annual £2.7 billion to imports and £1.8 billion to exports.
  • Import tariffs alone could push up the list price of cars imported to the UK from the continent by an average of £1,500 if brands and their retail networks were unable to absorb these additional costs.[22]

Aviation:

  • 960,000 people working in this sector.
  • According to ADS Group, not reaching a deal with the EU would have significant commercial consequences for UK industry, raising the costs of doing business, reducing our influence and damaging the UK’s reputation as one of the best places in the world to develop new technology and create high value jobs…
  • Customs and border controls could add significant administrative cost and cause delays at UK or EU borders.[23]

Construction:

  • 2,900,000 people working in this sector.
  • The APPG for Excellence in the Built Environment has said the consequences of Brexit could be disastrous for the construction industry and, in turn, the economy if swift action is not taken.
  • If access to skilled EU workers is cut off before the sector is able to train a domestic workforce, plans for the £500bn pipeline of new work including in excess of one million new homes by 2022, airport expansion and HS2 will not be deliverable. Abrupt labour bans would also impede the industry’s export potential, which is worth billions every year to the economy.

Healthcare:

  • 3,865,000 people employed in this sector:
  • There are approximately 144,000 EU nationals working in health and social care organisations across England: 80,000 in adult social care, 58,000 in the NHS, and 6,000 in independent health organisations.
  • According to the NHS European Office, the leave vote has created uncertainty on the future rights of these employees. If a significant proportion of EU nationals working in health and social care services leave as a result of the present uncertainty, the sustainability of some services and the delivery of high quality services would be jeopardised.[24]

Higher education: 

  • 410,130 people working in the sector
  • According to Universities UK, concerns for universities posed by the UK exiting the European Union include: Increased barriers to recruiting talented European staff; Damage to international research collaboration; Increased barriers to recruiting European students; Loss of funding for research and innovation; Reduced outward mobility opportunities for staff and students.[25]