The former top civil servant at the trade department has criticised Theresa May for failing to set out the harsh consequences of a “no deal” Brexit.
Sir Martin Donnelly – who quit his post earlier this year – said crashing out the EU without an agreement would be a ‘very serious outcome for the British economy”.
The Prime Minister had failed to set out the repercussions to jobs and investment of leaving the single market, let alone from failing to strike a different trade deal with the EU, he said.
Asked about the Prime Minister’s “no deal is better than a bad deal” mantra, Sir Martin said: “I’m not sure I understand what no deal means.”
The former permanent secretary to Trade Secretary Liam Fox added: “Am I worried about our future choices? Yes I am.”
Sir Martin also urged MPs to flex their muscles when it came to a final decision about leaving the single market, saying: “That is a choice for Parliament to make.”
The warning comes after Ms May started to prepare the British public for a no deal exit, with emergency plans to avoid border meltdown for businesses and travellers.
Huge inland lorry parks to cope with lengthy new customs checks were among “steps to minimise disruption” outlined for Brexit day in 2019.
Meanwhile, the Brussels negotiations remained deadlocked over Britain’s failure to make “sufficient progress” on the withdrawal divorce terms – blocking talks on future trade.
At home, Brexiteer Tories are openly urging the Prime Minister to walk out of the talks and embrace the no deal option, if the EU refuses to bend.
But Sir Martin said no deal – and being forced to trade without the European Court of Justice as a “referee” – would make cross-EU business “impossible” for some groups, such as lawyers.
The jobs lost would not just be in London, but in “back offices in Belfast, in Leeds, in Edinburgh, in Southampton”.
“Our lawyers, our accountants, our digital start-ups, professions from teachers to hairdressers, can work openly across that market – and we are very good at it,” Sir Martin said.
“What we have to do is be very clear about those trade offs – we can’t have our cake and eat it.”
He added: “Digital start-ups come to the UK, rather than to Berlin or Paris, because they know they can send data across borders, they can move people around freely.”
No deal would mean falling back on World Trade Organisation terms, but that did not include services – which make up 80 per cent of the British economy.
“It could mean an awful lot of legal uncertainty and that’s very bad for businesses, for jobs, for investment in Britain,” Sir Martin told BBC Radio 4’s Today programme.
He warned of a “chilling effect on investment”, also making it far harder to strike trade deals with non-EU countries, which would be in the dark about market access to the EU.
The EU’s refusal to move onto future trade – making no deal a growing possibility – will be confirmed at a summit of member states at the end of next week.