A no-deal Brexit on top of this coronavirus recession would weigh down the UK economy like an anchor

It was no surprise – but it’s nevertheless shocking.

The European Union’s chief negotiator, Michel Barnier, has confirmed that zero progress has been made in the post-Brexit settlement talks in the five months since the UK formally left the bloc in January.

The transition period runs out on 31 December. After that, we fall out of the EU regulatory framework with nothing to replace it and tariffs are imposed on our exports to the bloc.

The UK has until the end of this month to request an extension of the transition. The EU says it would accept such a request, something newly reiterated by Mr Barnier.

But the UK government has repeatedly ruled it out.

It’s no great surprise to hear the talks have made no progress given the raging coronavirus crisis, which has dominated the attention of ministers and prevented the Brexit negotiating teams meeting in the same room.

But it’s still shocking that, on top of the worst recession in peacetime history, ministers seem willing to see UK firms suffer the consequences of a no-deal Brexit in six months’ time.

David Frost, the UK’s chief negotiator, says the UK government remains “committed to a successful outcome”. Yet the talk emanating from Downing Street has been one of growing bullishness about the prospect of failing to reach a deal with the EU.

Two lines of thought seem to be emerging. The first is that because of the huge disruption of the coronavirus recession, the additional impact of a no-deal Brexit on trading business will be lower.

Michael Gove, speaking to the House of Commons EU committee last month, hinted that post-Covid-19 “reshoring” of supply chains by firms, as countries seek to build their national economic resilience, will change the calculation.

The second is that any economic damage from no deal will be subsumed in the damage from the Covid recession. Apparently ministers believe “the costs of leaving the EU single market without a trade deal are lower than they have ever been”.

Both lines of thought are misguided.

If a trading firm is currently seeing its orders collapse because of global lockdowns – or is being forced to take on more debt to keep operating – why would it be any easier for that firm to plan for the additional logistical and financial hurdles of a no-deal Brexit?

If anything, the current massive recession will make that task more difficult, not easier.

As for the economic damage being masked, that might have some element of truth in relation to the near-term damage from a no-deal rupture.

But it would have no bearing on the medium- and long-term costs of leaving the EU without a trade deal.

Credible estimates of the damage of Brexit – including that produced by the Treasury in 2018 – make it clear that most of the economic damage is done not in the first few months but over many years, as less trade with our biggest market and closest trading partners harms UK productivity growth.

Willingly inflicting a no-deal Brexit on the UK economy when it is in the midst of the worst recession in modern history would be akin to putting an anchor around the neck of someone trying to climb out of deep hole.

Ministers may be right or wrong to judge that the political costs of a no-deal Brexit are lower than they were before the coronavirus crisis.

But the public should be under no illusions about the economic costs: they have not changed and they are large.