Britain risks considerable disruption to many aspects of its economy and society, including trade, transport, health care and citizens’ rights, if it crashes out of the European Union next March without a deal, according to a report into the risks of a so-called “no-deal Brexit.”
The research from Kings College London’s “UK in a Changing Europe” program focuses on the short-term risks to Britain from a no-deal scenario, though it also cautions that there will be longer-term negative effects on the British economy.
The warnings come as British lawmakers returned from a six-week summer break Tuesday to growing uncertainty over Britain’s future relations with the EU, and continued speculation that Prime Minister Theresa May could face a leadership battle as the pressure mounts.
No withdrawal agreement
A withdrawal agreement with Brussels has yet to be worked out, raising the prospect of a chaotic “cliff-edge” Brexit. Report co-author Professor Jonathan Portes said such a result would be in the interest of neither party.
“But there are these big obstacles. The first is that of the Irish border, where at the moment, the position of the EU 27 (member states) is that there has to be a Northern Ireland-specific backstop legally written into the withdrawal agreement that ensures no hard border and carving out that special position for Northern Ireland where it remains to some extent intimately linked with the EU.”
However, such a special arrangement for Northern Ireland is unacceptable to many MPs, who fear it could ultimately split the United Kingdom.
Many lawmakers also don’t want to pay the estimated $50 billion divorce bill to Europe — money that is owed for existing commitments — without the guarantee of a future trade deal. But including such a guarantee in the withdrawal agreement is fraught with difficulty.
The complications are the natural result of 45 years of British EU membership, Portes said.
“The rules, regulations, law, policies and regulatory aspects of the EU have become fundamentally embedded in whole swaths of the UK’s social and economic infrastructure. So, it’s not just about trade. There are all sorts of other things that would come to a grinding halt on March 30 if we crashed out without any deal at all.”
The report warns trade with the EU would face immediate disruption, with potential food and medicine shortages. Safety certification for British aircraft would be invalid, possibly grounding flights. The rights of British citizens living in the EU would be thrown into doubt.
Reporting to parliament Tuesday on Britain’s progress in talks with Brussels, Secretary of State for Exiting the EU Dominic Raab said a no-deal Brexit remains unlikely.
“Our approach acknowledges that there are some risks to a no-deal scenario and demonstrates that we are taking the action to avoid, to minimize and to mitigate these potential risks so we are equipped to manage any short-term disruption. And while it’s not what we want, a no-deal scenario would bring some countervailing opportunities. We would be able to lower tariffs and negotiate and bring into effect new free-trade deals straightaway,” Raab told lawmakers.
Some European governments are resisting offering any concessions to Britain, Portes said.
“There certainly is a view among some in Europe, certainly in France and Germany and the (EU) Commission, that any sort of deal that appears to allow the UK to pick and choose, the cherry-pick, to ‘have its cake and eat it’ would indeed encourage disintegrationist and populist forces elsewhere in Europe.”
The political battles were mirrored on the high seas in recent days as British and French fishermen clashed in the English Channel. France has warned it may send in its navy to police the dispute. Fishing rights are another battleground in the long list of issues yet to be resolved.
Britain’s exit is due to be discussed at an EU heads of state meeting scheduled later this month in Austria.