The former governor of the Bank of England, Mervyn King, has attacked MPs over their handling of Brexit and called for Britain to leave the EU without a deal after six months of preparation.
In an extraordinary intervention, Lord King said it appeared Britain’s political class had “suffered a collective nervous breakdown” and accused MPs of exaggerating the economic risks of no-deal Brexit.
“MPs have rather somehow lost the plot when we hear of people talking about the consequences of leaving without a deal as national suicide,” he told BBC Radio 4’s Today programme.
He said it was not clear that a no-deal Brexit would trigger job losses across the country and that, with adequate preparation, the long-term economic costs of leaving without a deal would not be very different from staying in the bloc.
Saying the costs to the economy would depend on how well-prepared the country was for leaving without a deal, he said there could be some “short-run dislocation costs”, but added: “The more wild, exaggerated view that somehow we’re going to have queues of lorries on the M20 for five years or more is pretty absurd.”
The Bank’s former governor, who was replaced by Mark Carney in 2013, said the government should tell the EU that Britain intended to leave without agreeing a deal following a set period of time, which could be as long as civil servants said might be required to prepare.
“My own personal preference would be to go back to Europe and say we have a clear strategy, which is we want to leave without a deal, but we would like to take six months to complete the preparations to avoid the dislocation,” he said.
Under Carney, Threadneedle Street has issued repeat warnings that leaving the EU without a deal would cause significant economic damage and would damage living standards across the country.
The Bank published a worst-case scenario last year that included Britain plunging into an immediate recession worse than the financial crisis in the event of leaving the EU without a deal.
Speaking on the day the UK was originally scheduled to leave the EU, King blasted ministers for having failed to adequately prepare for a no-deal departure. He said a decision by Philip Hammond, the chancellor, not to accelerate spending to prepare the country for such a scenario had been “disastrous” and had cost the UK’s bargaining power in talks with Brussels.
The former governor said the decisions about leaving the EU should not be all about economics, and that considerations of identity, culture and politics were more important.
“It has been a scare story. I think it’s very unfortunate. There are arguments for staying and leaving, but it’s about politics. Do we want to belong to this club?” he asked.
