Exactly How Bad Would a No-Deal Brexit Be?
By: Jamie Bean
Tags: UK, Brexit, Politics, UK Politics, No Deal Brexit

Very, is the short answer.

Unsplash | Kristina G

They say the only things certain in life are death, taxes, and a never-ending Brexit.

The negotiations, re-negotiations, and repeated postponements of Brexit are reaching Bleak House levels of drawn-out bureaucracy. Charles Dickens would be rolling in his grave.

Since January 2020 when the UK put Brexit into motion, there’s been numerous delays to the whole process. I think everyone lost track of how many times the actual leaving date was postponed.

The end of Britain’s post-Brexit transition period is set for the 1st of January, 2021. The outcome of deal-or-no-deal is supposed to be decided this coming Sunday, although there remains possibility for reaching an agreement up until midnight on the 31st of December.

Downing Street recently stated that ‘very large gaps remain’ between the UK and the EU, looking like neither side is willing to settle over disputed issues despite discussions occurring for the past year. Three major factors currently disrupting possibility for a deal are fishing rights, government aid for businesses, and settlement strategies for potential disputes.

Boris Johnson’s insistence on avoiding any clauses tying Britain to the EU makes reaching a mutual agreement near-on impossible. If neither party is willing to compromise it’s possible there will be a no-deal Brexit. This will disrupt trade deals between the UK and the EU, causing economic damage on both sides.

The GBP will take a hit, and is currently forecast to drop in value by 2%. Exports coming in from the EU will be more expensive, and exports out will also be subject to tariffs.

It Will Result in the Loss of Over 300,000 Jobs

Departing the European Union with no trade deal means Britain will have to do business based on World Trade Organisation terms, meaning the shipment of goods and services will be subjected to tariffs and other such barriers. As Europe is Britain’s largest export market, this will have far-reaching effects across many industries.

UK businesses have already suffered economic damage this year from the COVID-19 pandemic. A UK with no trade deal established with the EU means they will lose tariff-free and quota-free access to a market that purchases over half of Britain’s exports. This will also affect the European Union, but to a much lesser degree as the UK is a smaller market.

According to the UK Office for Budget Responsibility, no deal will put more than 300,000 people out of a job. The UK is already in the midst of a jobs crisis resultant of COVID-19 related lockdowns; no deal could be disastrous for its workforce.

Groceries Will Become More Expensive

Supermarket shelves are set to be drastically altered by a no-deal Brexit. Around 30% of Britain’s food supplies currently come from the EU. Fresh fruit and vegetables not able to be grown in the United Kingdom will likely become scarcer, and more expensive.

Supermarkets have attempted to stockpile some non-perishables to prepare for the event of a no-deal. Most supermarkets currently have limited capacity for stockpiling in their warehouses, however, due to a build-up of Christmas stock.

Electricity and Gas Prices May Increase

While supplies of electricity and gas shouldn’t be affected, utility prices for both businesses and households are likely to increase.

This is due in part to an expected fall in value of the British pound, weakening against the euro in the event of a no-deal Brexit. There could also be disruption if European electrical companies choose to cut ties with the British market in the absence of a trade deal.

It Will Become More Difficult to Travel Europe

Deal-or-no-deal, Brexit is set to obstruct travel between the UK and the EU. British travellers will no longer automatically be entitled to health care in European nations, and will likely need to purchase travel health insurance.

International driving permits and insurance documents may be required. A lot more paperwork will be involved, causing hold-ups at customs. Border logistics for freight and transport companies will likely be thrown into chaos.

UK and EU Citizens Living Abroad May Begin to Lose Certain Rights and Services

Freedom of movement for both British and European citizens ends with Brexit. The UK currently has an agreement with the EU, Norway, Iceland, Liechtenstein, and Switzerland which protects the rights of European citizens living in the UK since before Brexit. However, they will now need to apply for the right to remain or risk deportation.

There is a reciprocal agreement for British citizens living in the EU, who will now also have to apply for the right to remain. In theory, even if there was no deal they should be able to continue to access employment, healthcare, education, and other rights of European citizens. However, the EU has warned that loss of EU citizenships will begin to affect access to such rights and services. In the event of resulting tensions if no deal is able to be reached, the future for those living abroad may be uncertain.

If There’s No Deal, the UK Has a Lot More to Lose Than the EU

The economic repercussions are going to hit the UK a lot harder than the EU if no deal is reached. They’ll be losing free trade access to their biggest global marketplace, at a time when the UK is headed into its worst recession in over 300 years.

With the nation plunged once again into COVID-19 lockdowns and London moving to Tier 3 level restrictions, such a loss couldn’t come at a worse time. The Bank of England’s governor recently warned that a no-deal could do even greater damage to Britain’s economy than the COVID-19 pandemic has so far. The chance to strike a deal is slipping away; let’s hope it’s good news come Sunday.