1146 GMT February 16, 2019
During a special cabinet meeting to discuss preparations for the UK crashing out of the union, Mark Carney told Prime Minister Theresa May and her senior ministers of the potentially dire economic consequences of leaving on poor terms, theguardian.com reported.
Cabinet sources said he painted a bleak economic picture of unemployment reaching double figures in percentage terms, house prices falling by 25-35 percent over three years, and transport links with the EU, including air travel and the Eurostar, stalling.
Several sources said Carney compared the outcome of a no-deal Brexit with the fallout from the 2008 financial crash.
One cabinet minister told the Guardian: “The government wouldn’t just stand by. It didn’t in 2008. He wasn’t saying it was all going to happen but I think there is a recognition that you do have to contemplate the worst-case scenario.”
After the meeting the government released another batch of no-deal technical notices that said UK driving licenses may not be valid in the EU, and travelers with UK passports close to expiry may be denied entry into the bloc.
Carney, who left the meeting after delivering his briefing, also set out a second scenario in which Britain left the EU but on worse terms than those offered by the prime minister’s Chequers plan.
One cabinet insider said: “The worse-than-no-deal scenario was very concerning, but it prompted a lot of broad agreement on the steps that we would need to take next to support the British economy in the event of leaving the EU on poor terms.”
A spokesman for the Bank of England declined to comment on Carney’s remarks to the cabinet.
The governor told the Treasury select committee last month that a no-deal Brexit was ‘highly undesirable’ and the possibility of it happening was ‘uncomfortably high’.
During the briefing, which lasted more than three hours, Philip Hammond set out what would need to be done to protect the economy in the event of leaving without a deal. The chancellor outlined economic interventions, including providing financial support for struggling businesses.
The home secretary, Sajid Javid, also set out what one of his cabinet colleagues described as his ‘manifesto’ for how the government should prepare for an economic crash in the event of no deal being reached.
The latest batch of no-deal notices revealed there could be a wide range of impacts on the British public, although ministers say the warnings are intended to help people plan.
The paper on driving said: “Your driving license may no longer be valid by itself when driving in the EU. If you move to another EU country to live, you may not be able to exchange your license after the UK has left the EU.”
British drivers may have to obtain one of two different types of international driving permit (IDP), depending on the destination country, in order to drive in the EU on business or on holiday. They will cost £5.50 and will become available from Post Offices from February 1 if no exit deal is struck.
However, people holding EU driving licenses will be able to drive in the UK without requiring any extra paperwork.
“The UK does not require visiting motorists … to hold a separate IDP to guarantee the recognition of their driving license,” the paper said.
The prospect that British licenses may not be valid in case of a no-deal Brexit was revealed by the Guardian in February.
The paper on passports said UK citizens who plan to travel to the Schengen area after 29 March 2019 should ensure their passports have more than six months’ validity.
It also said Britons could start receiving post-Brexit blue passports by the end of 2019, towards the end of the transition period, but that is not guaranteed.
Passports printed between March 30, 2019 and the introduction of the new passport design would be burgundy but would not include the words ‘European Union’ on the cover. It is possible, however, that burgundy passports could still be issued until early 2020.
Other papers reveal:
● Mobile phone bills for Britons travelling in the EU would no longer be subject to existing tariffs. The government said it would legislate to ensure there would be a cap of £45 a month on international mobile data use if Vodafone, O2 and other operators did not agree to absorb the costs of higher roaming charges.
● Ferries and cargo ships may have to supply EU ports with lists of their last 10 ports of call, the crew and passengers. EU law currently exempts ships making regular journeys from this requirement.
● Personal data could still be sent from the UK to the EU, but Brussels would need to rule on whether it views Britain’s data protection rules to be adequate before organizations are permitted to send personal data back. Without an agreement, firms would need to identify some other legal basis for transfers.
● Britain would not automatically get warnings from the EU Space Surveillance and Tracking program about asteroids and other space debris plummeting towards Earth. However, the paper on satellites and space programs said the UK would continue to receive equivalent warnings from the US.
● Smokers would see a new range of graphic pictures appearing on their cigarette packets to warn them of the dangers to their health, as the copyright for the existing picture library is owned by the European commission.
Before the meeting, the Brexit secretary, Dominic Raab, said the government would withhold a ‘very substantial’ part of the £39 billion divorce bill agreed with the EU if no deal could be reached.
The Brexit secretary said he believed the no-deal papers were “part and parcel of our sensible, pragmatic approach to preparing for all outcomes”, but he added: “Getting a deal with the EU is still by far and away the most likely outcome.”
The papers are an attempt to show that Britain is seriously planning for a no-deal Brexit on 29 March in order to strengthen its negotiating hand with Brussels, although May has repeatedly said she would prefer to strike a deal.