A “no deal” Brexit would be an “unforgivable act of economic and social self-harm”, says the Association of British Insurers (ABI).

Parliament will vote tomorrow on Prime Minister Theresa May’s latest proposal, but many expect it will fail to gain enough support.

This would leave the UK facing a disorderly “no deal” exit, or alternatively it could agree a delay to the departure date of March 29.

ABI Director General Huw Evans says a short delay would be preferable “as a last resort” if the only other option is crashing out with no deal.

He also fears if the UK has to comply with rules it has no say over, then these rules could be “weaponised” by the EU “to damage the UK”.

“A no-deal outcome would be an unforgivable act of economic and social self-harm,” Mr Evans said.

“It would mean leaving the world’s single biggest trading bloc overnight with nothing but World Trade Organisation (WTO) rules to replace it.

“This would be wholly inadequate and unprecedented. The WTO framework itself is designed to provide a mechanism for states to resolve trade disputes – it is not designed to be a safety net for the world’s fifth-largest economy leaving the world’s biggest trading bloc.

“This matters because the EU is – by a very long distance – the largest export market for the UK insurance and long-term savings industry.”

Mr Evans says the UK insurance industry has done “everything possible” to prepare for no deal, including transferring 29 million insurance contracts and the establishment of nearly 40 subsidiaries and branches in Europe.

“But we still believe very strongly that a conscious decision to opt for no deal would be an act of economic recklessness our great country would live to regret, with WTO rules offering little to no protection against the consequences.

“As a last resort, if the only alternative to no deal is some form of short delay to Brexit, then delay we should.”