Cost of no Brexit deal will be “widespread, damaging and pervasive” leading academics find

The consequences of the UK failing to reach a deal with the EU will be “widespread, damaging and pervasive” a new report by The UK in a Changing Europe finds.

The ‘Cost of no deal’ report examines the consequences of the UK failing to strike either an Article 50 or a trade deal with the EU – what is termed a ‘chaotic Brexit’.

In the event of a chaotic Brexit, the UK’s nuclear plants may not be able to operate; British airlines might be unable to fly; and both UK citizens in the EU and EU citizens here would find themselves in legal limbo.

A chaotic Brexit would also have serious political and economic implications for Northern Ireland.

Potential uncertainty when it comes to monitoring and implementing rules, notably in the area of the environment, could result in weaker protections.

Legal chaos over the enforcement of contracts is merely one area of uncertainty which will prove costly and time consuming for British businesses exporting to the EU.

Complex cross-border supply chains would be disrupted, not least because requisite customs checks, tariffs and regulatory barriers will not be in place.

Drugs developed in the UK may not have their approval recognised in other member states and clinical trials would be disrupted.

Professor Anand Menon, director of The UK in a Changing Europe, said: “Our findings show a chaotic Brexit would, at least in the short term, spawn a political mess, a legal morass and an economic disaster. This report makes it clear ‘no deal’ is an outcome the British government must strive to avoid.”

The report shows that a chaotic Brexit might come about in two ways:

  • A premature Brexit: where talks break down acrimoniously with the UK unilaterally ceasing to pay its EU contributions and ending the supremacy of EU law in the UK with immediate effect
  • A timed out Brexit: where the talks do not completely break down, but no agreement is reached within the two year period and there is no extension.

The likely economic impact of no deal includes: a further significant fall in the exchange rate, a consequent rise in inflation, a fall in wages and consumer demand and a fall in business confidence, leading to a slowdown in investment.

The report shows there would be serious political ramifications if a premature Brexit occurs. The government is likely to blame Brussels and remain backers at home – creating further acrimony with the EU and bitter divisions in British politics. A mutual blame game will make future cooperation with the EU more difficult.

Professor Menon concludes: “’No deal’ doesn’t mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive.”

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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  • Jo Archer

    Could we ensure copy sent to all MPs to read on their holidays

  • Richard Burnett-Hall

    Why can’t I download the report? Every time I try I simply get: “Failed to load PDF document”.

    • John O’Brien

      I have the same problem

    • Richard Burnett-Hall

      The website has now been corrected – long enough for me to get my copy anyway.!

  • Horiboyable .

    The UK traded for 100’s of years without the EU and we did much better at it, in fact we ruled the seven seas until the weak, spineless, I can’t possibly stand on my own two feet generation came to be. Then they started to trade in there freedoms for free dentures from the NHS. This snowflake generations are pathetic. Our children get blown up at pop concerts and is our response to route out these terrorists? No we teach them a lesson by lighting some candles and give random strangers hugs and go to another concert where many “has beens” to up for the publicity and do some virtue signaling . OOOh ISIS is so scared of you, they would be laughing their heads off while polishing the AK47s.

    I do not care what the costs are, I want to live in a democracy, not tyranny. We have seen the true nature of the EU beast, not one EU member came out against the violence perpetrated on the Catalan Citizens. Europeans have NEVER truly understood true democracy and liberty. All you have done is swapped the divine right of kingsqueens to the divine right of the collective.

    Socialism is the doctrine that man has no right to exist for his own sake, that his life and his work do not belong to him, but belong to society, that the only justification of his existence is his service to society, and that society may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good. The essential characteristic of socialism is the denial of individual property rights; under socialism, the right to property (which is the right of use and disposal) is vested in “society as a whole,” i.e., in the collective, with production and distribution controlled by the state, i.e., by the government.

    Socialism may be established by force, as in the Union of Soviet Socialist Republics—or by vote, as in Nazi (National Socialist) Germany. The degree of socialization may be total, as in Russia—or partial, as in England. Theoretically, the differences are superficial; practically, they are only a matter of time. The basic principle, in all cases, is the same.

    Socialism is collapsing right now. You are about to find out it has been nothing but a massive socialist Ponzi scheme. You know that advert on TV, “I’m In” where you are being forced by the state to pay in for a pension. Well I have been paying in for 40 years now and the state has squandered it. I am not putting into a second pot when they have stolen the first pot, they will simply steal the second pot as well. The hallmark of a societyempire when in the process of collapse is they always debase their currency right back to Roman times, they have to cheat to try and stay in the game. They have suppressed interest rates so much that even private pension plans are blowing up now. Years ago when private pension were first setup they used a mathematical model using an interest rate of 6 to 8% and they have not been able to get yield like that for well over a decade so they are all taking on water. When the bond market collapses which it will, you will see many European Govt collapses just like they did in 1931/32, just remember to take your anger out on those can kickers, the politicians.

    • Centristica

      What a load of ravening shite. See a psychiatrist.

      • Horiboyable .

        OK then, things are so much better now.

        Read history you angry Corbynite. I am voting Corbyn next time and watch capital flow out of the UK and we will default on our GILT’s.

        I am ok though because I have my NZ passport ready and waiting and will leave you in the compost. Haha

        • Centristica

          I don’t live in the UK, thank Christ – I live in a social democratic country which is much fairer and more egalitarian. But unlike you, I care about friends and family who do live in the UK and who have bee raped by Tory austerity. By the way, one of my degrees is in history, so don’t waste your breath.

          • Horiboyable .

            Spin how you want, social justice, egalitarianism but at the end of the day it is just common theft.
            I am glad you brought Christ into it because he was a great advocate of one of the ten commandments “thou shalt not covet thy neighbor’s goods”. Socialism is a system where the dumb continually steal from the smart and once these parasites have killed the host, they will die too unless another host is found. The west is in the process of collapse and will be over in about 15 years and socialism will collapse with it.
            The similarity between the collapse of Rome and the west today are remarkable, expensive standing armies, pensions that the state cannot honor and of course the hallmark of all collapsing societies, is the debasement of their own currencies.
            The truth is that if you put politicians in charge of the Sahara desert you would soon run out of sand. I see that socialism is really working out in Venezuela.

            I hope your Uni and a safe space for you when you attended.

            Bless you.

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