The UK government has not conducted an economic assessment on what impact splitting from the EU without a deal would have on British business, David Davis admitted on Wednesday (15 March).

"We could not quantify the outcome of [a final Brexit deal]...we can manage [no deal] to be better than a bad deal," the Brexit Secretary told a group of MPs.

The top Tory's remarks to the cross-party Exiting the EU Committee, chaired by Labour's Hilary Benn, came just minutes after EU Council chief Donald Tusk warned against a no deal scenario.

"We will not be intimidated by threats that no Brexit deal is good for UK [and] bad for [the] EU. No deal bad for everyone, above all for UK," he said on Twitter.

"[I] will do everything in my power to make sure that UK, EU are close friends after Brexit and stress that EU's door will always remain open."

Theresa May has told the EU that "'no deal is better than a bad deal for Britain". Davis, meanwhile, said that potentially trading on default World Trade Organisation rules with the EU "it's not as frightening as some people say".

"The presumption of no deal is literally that it would be a presumption of most favoured nation status under the World Trade Organisation arrangements, which means there will be tariffs," he added. "It doesn't say very much about non-tariff barriers, but the presumption you are making is probably right."

The exchange comes after the Article 50 bill passed through parliament on the evening of Monday 13 March. Davis said the draft legislation will receive Royal Assent and pass into law on Thursday.

The bill gives May the legal authority to invoke Article 50 of the Lisbon Treaty and trigger Brexit talks, which she is expected to do at the end of March.

Labour's Shadow Brexit Secretary Sir Keir Starmer accused the government is "recklessly talking up the idea of crashing out" of the EU. "They have repeated the mantra that 'no deal is better than a bad deal'," he said. "But we now know they have made no assessment of the economic impact of the Prime Minister failing to secure a deal.

"What's clear, from the CBI [Confederation of British Industry] and others, is that there is no result that would be worse for the British economy than leaving with no deal; no deal would be the worst possible deal. The government should rule out this dangerous and counter-productive threat before Article 50 is triggered."

Theresa May's 12-point Brexit plan

  1. Government will provide certainty and clarity to politicians and businesses
  2. UK will 'control our own laws' by quitting the European Court of Justice
  3. Strengthen the 'precious union' between England, Wales, Northern Ireland and Scotland
  4. There will be no 'hard border' between Northern Ireland and the Republic of Ireland
  5. UK will 'control' EU immigration, while recruiting the 'brightest and the best' from around the world
  6. Government will seek a reciprocal residency rights deal for EU and UK workers 'as soon as possible'
  7. To protect workers' rights
  8. Ministers will seek a 'bold' and 'comprehensive' free trade agreement with the EU
  9. UK will seek a customs agreement so that it can broker its own trade deals with non-EU nations
  10. Maintain European science and innovation ties in bid to keep the UK a 'world leader'
  11. UK will continue to work with the EU to combat the threat of terrorism
  12. Ministers will seek to avoid a 'cliff edge' and seek a smooth split from the EU