No-deal Brexit would have a chaotic and severe short-term impact on UK, think tank warns

The short-term impact of a no-deal Brexit on Britain’s economy would be “chaotic and severe”, jeopardising jobs and disrupting trade links, warn experts from the think tank UK in a Changing Europe.

The Brexit secretary, Dominic Raab, has said he believes 80 per cent of the work on completing an exit deal with the other 27 EU members is already done, as negotiations enter their final phase.

But his cabinet colleague Liam Fox recently suggested a no-deal scenario – which would occur if negotiations broke down, or both sides agreed to disagree – was the most likely outcome.

In a 30-page updated assessment of the impact of no deal, the think tank said on Monday it would mean “the disappearance without replacement of many of the rules underpinning the UK’s economic and regulatory structure”.

Its analysis claimed that in the short term:

Food supplies could be temporarily disrupted – the beef trade could collapse, for example, as Britain is heavily reliant on EU imports, and would be forced to apply tariffs, in accordance with World Trade Organisation (WTO) rules. European health insurance cards, which allow British tourists free health care in the EU, would be invalid from Brexit day. There would almost certainly have to be a “hardening of the border” between Northern Ireland and the Irish Republic, including some “physical manifestation”. The status of legal contracts and commercial arrangements with EU companies would be unclear, as the UK would become a “third country” overnight. Increased and uncertain processing times for goods at the border would be “nearly certain”, risking queues at Dover and forcing firms to rethink their supply chains.

In the longer term, UK in a Changing Europe’s experts say, the UK would have time to normalise its trading status, and agreements could be struck with the EU27 to tackle many other practical challenges.