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Analysis

10 reasons crashing out with no deal would be bonkers

by Hugo Dixon | 30.05.2017

Theresa May’s latest robotic mantra is “no deal is better than a bad deal”. No, it isn’t.

Here are 10 reasons 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.

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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 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?

All the more reason why it is essential that May does not emerge on June 9 with a big enough majority to drive the country over a cliff.

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This piece is a modification of an article that was originally published in March

Edited by Luke Lythgoe

7 Responses to “10 reasons crashing out with no deal would be bonkers”

  • In reading Hugo Dixon’s analysis one has to wonder what the UK government is thinking of to put so much at risk for the UK, its citizens and economy. It is almost as if Mrs May and her colleagues are taking on the mantel of the suicide bomber.

    • I think you have missed the point. The people have voted to leave the EU, and that is THE ISSUE. Now Theresa has to NEGOTIATE with the EU to settle the terms of our leave, and the EU HAVE NOT stated discussions about it. Consequently, it is NOT possible for us to say what will happen to EU citizens currently resident in UK or to UK citizens currently in the EU. The cost of leaving the EU is a secondary issue, as voting to leave was the fundamental issue. I know that the EU have been taken aback by one member wanting to leave and are proposing some punitive measures, but there is NOTHING that we can do about their attitude to us. If they want us as friends, we would welcome it, but if the y are going to be vindictive, then that is how it is.

  • I feel that number 3 is by far the most important and should be made more of. We have a £30bn trade surplus with the rest of the EU in services. This is likely to be hit with swingeing tariffs. Trade in goods is a lot easier and covered by WTO rules. In other words, if we crash out of the EU, they will be able to continue exporting to us much as before, but our exports to them will suffer greatly.

  • There’s no point in May saying she will leave without a deal, she’s also said that won’t happen as there will be a deal. I imagine it’s just her sounding tough..strong for the electorate who regard aggression as strength. She doesn’t even need a strong hand, what it appears she is after is no opposition in parliament so she can push through what she likes. Her being strong has nothing whatsoever to do with Brexit, all it will serve to do and has already done is get backs up with the EU-27. It’s in their interest to have a good deal with us too and this will be achieved much easier with someone who can negotiate not hard line and stomp off if not getting their own way. Remember, it won’t be May and Corbyn doing the negotiations. it will be BoJo and Keir Starmer.

  • Lots of false assumptions or ignoring what “a bad deal” means.
    1. A bad deal will poison the relationship – so this will be true regardless. However not paying tens of billions is better.
    2. We may still agree somethings even if we don’t make a deal on others. This is likely to be one of them. However even if not, then it means they will be treated like any other non-UK citizen. This would mean less cost to UK government. Likewise UK citizens abroad may lose some benefits, but not much.
    3. This cuts both ways and as we import more from EU than we export to them, on the whole this will be better for us for customs revenues.
    4. It may do. However as we aren’t part of Schengen it won’t have as big an impact on us as for those in it (if they were to leave). It would require employing more customs people, and putting things in place, but no big deal.
    5. Any deal would still require those regulatory bodies doing this, and this isn’t based upon any deal made with the EU.
    6. Will Scotland trade suffer? Possibly in the short term, however the positives such as regaining fisheries etc may counteract such a thing.
    7. We have had a deal with Ireland which predates the EU and this can be sorted separately. It is could be an issue, but unlikely due to sharing of information between UK and Ireland eland happens due to the CTA.
    8. EHIC is not part of any deal. It is a separate agreement.
    9. Agsin wrong as the legal basis is not part of EU rules.
    10. Dealing with Putin or whoever is through UN and NATO so though we may have some areas of disagreement this particular aspect won’t be affected.
    In FACT none of the 10 reasons given will be a problem with no deal. There will be problems and you touched on them with your first point about poisoned relationships. Yet a bad deal will most certainly poison relationships too. So the best is to work for a good deal.

  • TM is a blowhard. They know that. We know that. She asked for a mandate to ” strengthen my hand”. Self-serving nonsense. She leads a ragtag army of mercenaries, mediocrities and loons with no binding beliefs, weapons loaded with blanks and bottomless reserve of delusion. It will end in tears. Actually Hugo’ s most important point is 4: stripped of Europe’s human rights shield the outlook for a liberal Britain or what’s left of it is grim.