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Analysis

10 reasons ‘no deal’ Brexit would be bonkers

by Hugo Dixon & Luke Lythgoe | 18.10.2017

One minute Theresa May is threatening “no deal”. The next she’s scurrying to Brussels, desperately pleading for a deal.

Here are 10 reasons why crashing out would be bonkers.

1. Price hikes

If we fall back on WTO rules, tariffs will be slapped on EU imports: 45% on cheese, 37% on meat, 10% on clothing and footwear, 10% on cars. All in, it could cost families an extra £260 per year. Brexit inflation, caused by the plunge in the pound after the referendum, is already running at 3%. “No deal” would make a bad situation worse.

2. Customs chaos

Good luck with that “frictionless” border, prime minister. No deal means tailbacks at the border as the EU insists everything is checked. Lorries could be backed up all the way from Dover to the Dartford Crossing in Essex, says the FT. With trade gummed up, companies would have to fire people.

3. Planes grounded

We’d need a new deal fast or all flights between the EU and UK could be grounded. Airports and airlines are worried – even the chancellor has admitted it’s “theoretically conceivable”. This is because UK would lose access to Europe’s Open Skies agreement, which sets the rules for the aviation industry.

4. Citizens’ rights up in the air

Three million EU citizens in the UK and a million Brits on the continent would see their rights disappear overnight. Expect an exodus of nurses, doctors, fruit pickers, construction workers, restaurant staff, financiers, entrepreneurs… followed by staff shortages and lower taxes to spend on things like the NHS.

5. 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 to do this.

6. Hard border in Ireland

Products such as Guinness criss-cross the Irish border several times during the manufacturing process. Each crossing would face delays and customs fees. And what of people who cross the border to work or communities that share hospitals? The peace process has been working well in Ireland over the past 20 years. All this would stoke tensions between nationalists and unionists.

7. Golden opportunity for SNP

If we crash out without a deal, Scotland will probably suffer a bad recession. The Scottish National Party will then find it easier to stir up the anger of the Scots and so destroy the 300-year union between England and Scotland.

8. Regulatory minefield

Medicines, chemicals, food standards, banking, nuclear energy, maritime safety, police cooperation… So much of our lives is regulated by a network of dedicated EU agencies. We’d drop out of all of them with no deal. Many industries will struggle to function until new agreements are in place.

9. Trade turmoil

The UK won’t just crash out of the EU’s single market. We’ll also lose the free trade agreements the EU has with 66 other countries from Canada and Mexico to Switzerland and South Korea. That would further clobber the economy.

10. Dangerous world

We work side by side with our EU partners to tackle the dangers in our neighbourhood: imposing sanctions against Russia for its occupation of Crimea, fighting people smugglers off the coast of Africa and so forth. The government wants to keep doing this. But if the EU is pursuing us through the courts for tens of billions of pounds it says we owe, how easy will that be?

All the more reason May’s dysfunctional government cannot be allowed to drive our country over a cliff.

This is a new version of an article that originally appeared in March.

The ordering of the bullet points was changed shortly after publication. Point 1 has also been amended to recognise that tariffs on EU goods would be a result of falling back on WTO rules.

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11 Responses to “10 reasons ‘no deal’ Brexit 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.

    • From the perspective of Westminster/London-centric rule of Britain, the loss of Scotland through independence would be a loss. loss of territory, loss of tax-paying people, loss of power and influence …
      just like having Northern Ireland be a somewhat detached, autonomous region post-Brexit would be a loss of sovereignty.

      However, taken from a local nationalist point of view (you case I suppose), the opposite would be true : for a SNP voter, an independent Scotland would be a gain.
      just like for a Sinn Fein voter, an independent Northern Ireland (or better reunited Ireland) would be a boon

  • Parishioners in my Church misguidedly believed it was patriotic to vote leave.
    My view is that it is not Christian to leave Europe.
    They are our brothers and sisters.
    Love your neighbour means exactly that. All of them.