And Shanker Singham, Director of the International Trade and Competition Unit of the Institute of Economic Affairs think tank, also rejected the idea that anyone was “going for a no-deal”, stressing the important thing was to secure a free trade agreement which suited Britain – while warning the EU failure to strike an agreement would be “very bad” for Brussels. Meanwhile Mr Singham has also backed former Brexit Secretary Dominic Raab’s idea of offsetting tax breaks for businesses against – as well as backing Dominic Raab’s idea of “Brexit budget” offering tax breaks to businesses preparing for a no-deal scenario, rather than handing over £39billion to the EU. In a column in the Daily Telegraph, Mr Raab – who resigned from his post last month after Mrs May unveiled her Brexit divorce deal – wrote: “The Treasury must prepare a Brexit budget to identify businesses – including ‘just in time’ manufacturers – most at risk from a departure on WTO terms.
“We should cut business taxes to boost them as they transition, and offset the cost from the £39 billion the UK would have paid the EU.”
Mr Singham backed his suggestions, telling Express.co.uk: “This is certainly an important part of no deal planning.
“In addition to slashing corporate tax, I would also give firms a break on capital gains tax for investing in plant and equipment for a period. Many companies, because of uncertainty have delayed investment decisions and are accumulating cash on their balance sheets.”
Creating a tax environment which encourages them to invest in the UK would be a “sensible thing to do”, he explained.
Mr Singham added: “Raab has outlined the key steps that need to be taken.
“One of the mistakes, many MPs are making is assuming that some are “going for no deal.”
“One does not “go for no deal”.
“No deal is what happens if we fail to secure a deal.
“This is an important distinction because it means that we must continue efforts to get a good deal (and the PM’s deal is a bad one), by laying what a good deal looks like for both sides, including the text of an free trade agreement in short order.”
He said Britain should at the same time prepare for the contingency that the EU, for whatever reason, “including intransigence”, failed to agree a deal.
He said: “The more prepared we are, the better deal we are likely to secure.
“EU exporters of agriculture, cars and other manufacturing need access to the UK market where their exports are substantial.
“A no deal outcome is very bad for them, and as long as our government is able to face them down, we will likely secure a deal.
“If we continue to manifest weakness, a no deal outcome becomes a greater possibility.”
Mrs May is under increasing pressure with less than 100 days to go before March 29, 2019, the day the UK is scheduled to leave the EU.
A Parliamentary vote on her withdrawal agreement originally scheduled for December 12 will not now take place until the week beginning January 14.
The vote must happen by January 21.