The Bank of England governor has rubbished a key Boris Johnson claim for avoiding economic damage after a no-deal Brexit, in a severe blow to the Tory leadership favourite.
“The Gatt rules are clear. Gatt 24 applies if you have a [withdrawal] agreement, not if you’ve decided not to have an agreement, or you have been unable to come to an agreement,” he told the BBC.
“We should be clear that not having an agreement with the European Union would mean that there are tariffs, automatically – because the Europeans have to apply the same rules to us as they apply to everyone else.”
Alistair Burt, a former minister and supporter of Jeremy Hunt, Mr Johnson’s rival, said: “You have got to be on top of the detail – no-deal would be very dangerous.”
He pointed out the gaffe came after Mr Johnson had stumbled over his plan for huge tax cuts for high earners when the impact on taxpayers in Scotland was revealed.
To use Article 24 of the General Agreement on Tariffs and Trade (Gatt) – avoiding tariffs on goods – a trade agreement must be agreed in principle, rather than be an aspiration.
Its use also needs the two sides to agree, meaning the UK could not simply impose it on the EU after a crash-out departure.
During Tuesday night’s TV debate, Mr Johnson was challenged by Rory Stewart on the import taxes – and therefore border controls – that would be required on agricultural goods crossing to and from the Republic.
He replied: “There will be no tariffs, there will be no quotas, because what we want to do is get a standstill in our current arrangements under Gatt 24 – or whatever it happens to be – until such time that we have negotiated an FTA [Free Trade Agreement].”
The answer appeared to betray the former foreign secretary’s lack of detailed knowledge, a persistent criticism of his record in office.
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