There are just over 200 days until the United Kingdom bids farewell to the European Union, and negotiations are entering their final stages. But what if these negotiations are fruitless, what will happen to the UK if a no-deal Brexit becomes a reality?
Theresa May is known for saying that ‘no-deal is better than a bad deal’ but unfortunately for her, several political actors of all persuasions see her Chequers proposals as a bad deal and it seems unlikely that this will change. What was once seen as a remote possibility in a dire situation, the prospect of a no-deal Brexit has become more likely. In a recent speech, Brexit Secretary Dominic Raab outlined what a no-deal would mean for the UK, providing what he considers ‘practical and proportionate’ advice should the scenario materialise.
Bank of England governor Mark Carney has described a no-deal scenario as… being the worst possible outcome of negotiations
So what does the government expect to be the result of a no-deal Brexit?
Businesses have been warned to prepare for more bureaucracy as new customs checks will likely be introduced, and the cost of card payments between the UK and EU are also predicted to increase as there may not be a ban imposed upon surcharges. British organic food producers are also expected to face increased difficulty when exporting food to the EU due to regulatory differences, and pharmaceutical companies have been advised to maintain a six-week stockpile of certain medicines to mediate against the possibility of shortages. Bank of England governor Mark Carney has described a no-deal scenario as ‘highly undesirable’, reflecting the consensus of the business community of a no-deal being the worst possible outcome of negotiations.
But what would the impact of no-deal be on the ordinary person? One of the biggest fears of those who love their holidays is that the cost of European travel will increase. We may see a return to visa requirements, which could cost a fair amount, and a need for travel insurance should European Health Card membership is discontinued. And remember how the EU ditched roaming charges, allowing us to use our mobiles on the continent for no additional cost? That may also see the light of day.
Not all hope is lost in a no-deal scenario: the option remains for the UK to negotiate on individual issues
However, this may not be as bad as it seems: higher prices to visit Europe may make the prospect of visiting other destinations more attractive. Turkey, for example, may become an increasingly popular pick given the recent weakening of the Lira. Ultimately, it is important to remember that not all hope is lost in a no-deal scenario: the option remains for the UK to negotiate on individual issues, such as the roaming charges policy, without the need for a comprehensive Brexit deal. Of course, this would require the political will on both sides.
Back in the UK, concerns have been raised over the possibility of food shortages following a rigid break from the EU. Nevertheless, this claim has been refuted by several experts, including David Thompson, chief executive of the Scottish Food and Drink Federation. Speaking to the BBC, he argued that, whilst there may be shortages of certain products caused by regulatory differences or customs checks at borders (including cheese, tomatoes and chocolate), this would be no different to the shortages experienced in the heatwave over the summer. Nonetheless, it is also worth remembering that the price of food may increase – should the UK resort to World Trade Organisation rules, food prices are predicted to increase by up to 13%.
A no-deal Brexit would undoubtably be a messy outcome. Often compared to a cliff edge, it is difficult to predict what would happen in this eventuality. Aside from the aforementioned implications, it is also important to consider how the pound and stock markets would react, as well as how the political landscape may change in the aftermath of the divorce. But not all hope is lost: it is reassuring that the government is preparing for such a scenario. Whilst we may be jumping off a cliff, at least we will have a parachute.