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Analysis

10 reasons crashing out with no deal would be bonkers

by Hugo Dixon | 14.03.2017

Boris Johnson told ITV’s Peston on Sunday it would be “perfectly OK” if we don’t get a deal with the EU. No it wouldn’t – as a report by the House of Commons Foreign Affairs Committee published at the weekend makes clear.

Here are 10 reasons (not all mentioned in the report) why crashing out would be bonkers.

1. Bitterness all round

If we quit without a deal, our relations with the EU will be poisonous. For one thing, we can expect the bloc to pursue us in the courts for the tens of billions of euros they say we owe it. It will be hard to cooperate on other things until and unless this is decided.

2. Citizens’ rights up in the air

Theresa May says one of her priorities after triggering Article 50 is to settle the rights of the 3 million EU citizens resident in the UK and 1 million Brits living in the EU. But if there’s no legally binding exit deal, their fate – including their rights to stay, be employed, receive pensions and health care – could be up in the air.

3. Taxing tariffs

Without a deal, there will be tariffs on some of our exports to the EU – for example, 10% on cars and 30-40% on meat and dairy produce.

4. Customs chaos

The prime minister says she wants customs arrangements to be as “frictionless as possible” post Brexit. That will be hard to pull off even if we are negotiating in an amicable way. If we end up in a bitter divorce, procedures for checking goods at the EU frontier could gum up trade.

5. Regulatory minefield

There are 33 EU regulatory bodies which govern safety in everything from aviation and food to medicine and finance. The government plans to copy and paste all EU regulations into our law when we quit via its oddly named Great Repeal Bill. But if we quit without a deal, the mere fact that we will still be following EU rules doesn’t mean that it will accept that we are complying. In that scenario, a whole host of industries would not be able to operate in the EU until and unless they were authorised directly by its regulatory bodies.

6. Golden opportunity for SNP

Nicola Sturgeon said today she wants a new Scottish independence referendum. If we crash out of the EU without a deal, Scotland will probably suffer a bad recession. The first minister will then find it easier to stir up the anger of the Scots and so destroy the 300-year union between England and Scotland.

7. Gift horse for Sinn Fein

Gerry Adams’ Sinn Fein was the big winner in this month’s Northern Ireland elections, almost beating the pro-Brexit Democratic Unionist Party (DUP) for the top spot. It traded on the fact that most Northern Irish people are anti-Brexit and worried about a hard border with the Republic of Ireland. If we quit the EU without a deal, it’s difficult to see how we can avoid the return of intrusive customs controls on the border.

8. Trouble for tourists

When Brits travel around the EU they can use European Health Insurance Cards to get free treatment. They also benefit from the fact that the cost of using their mobile phones is capped – and, from June, will be the same as using them at home. If we quit the EU without a deal, both these benefits could end.

9. Fighting terrorism

The government wants to keep working with the EU to tackle cross-border terrorism and crime post Brexit. But without a deal, there won’t be any legal basis for such collaboration.

10. Standing up to Putin

We currently cooperate with other EU countries on a range of foreign policy issues, including sanctions against Russia for its occupation of Crimea and fighting piracy off the coast of Africa. The government wants to work more closely with the EU on foreign policy post Brexit. But if we are fighting the EU through the courts, how easy will that be?

The Foreign Affairs Committee said it would be a “dereliction of duty” if the government doesn’t make contingency plans for crashing out of the EU without a deal. That’s true. But nobody should be under any illusions that good planning can do more than take the edge off what the committee describes as “a very destructive outcome leading to mutually assured damage for the EU and the UK”.

All the more reason why it is essential that May does not quit the EU without a deal unless she first gets parliament’s approval. It’s a terrible shame MPs haven’t backed the House of Lords amendment spelling this out. But there’s nothing to stop parliament having a debate on this topic if the prime minister does plan to crash out, as even David Davis, the Brexit secretary, admitted. It would be deranged not to do so.

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Edited by Luke Lythgoe