Here we go again. After a year in which the government has played down the chances of the UK leaving the EU with no agreement even on withdrawal issues, no deal is back with a bang. It was perhaps inevitable that, as the Brexit endgame approached, people were bound to start thinking again about the implications of the whole thing ending in a car crash, with no deal signed between the UK and the European Union.
And so we at The UK in a Changing Europe decided to revisit the report we did on this subject more than a year ago. After all, for all the sound and fury of the Brexit debate, it has become predictable. Oozing from the pages of the government’s technical reports on no deal was the perceived need to placate Brexiters by signalling that “no deal” preparations were being made, while simultaneously underlining the problems such an outcome would entail. Reactions were equally predictable. Remainers emphasised what they saw as the lunacy of a no-deal outcome, while leavers settled back on tried-and-tested claims about “project fear”. Time, we thought, for an impartial assessment.
Our conclusions are every bit as grim – if not more so – than they were first time round. In sectors ranging from air transport to agriculture and fisheries, the impact of no deal would be profound and overwhelmingly negative. The absence of any clear legal framework to regulate the UK’s commercial and other relations with the EU and numerous other parts of the world will wreak havoc on trade. And the rights and status of millions of our fellow citizens in the UK and in the EU will be put in doubt.
Happily, we do not see a no-deal outcome as the most likely one. Clearly, there are still significant hurdles to be cleared in the negotiations. And it is far from a foregone conclusion that a parliamentary majority can be cobbled together for whatever deal is arrived at. Yet both sides have a vested interest in securing a deal – or at least postponing the day of reckoning – and, let’s face it, the eleventh hour is when the EU tends to strike its agreements.
What has been perhaps most striking as the no-deal debate cranks back into action has been the profound lack of understanding that continues to mark the conversation. For one thing, the analogy of a “deal” has itself proved to be profoundly misleading. In virtually all social and commercial situations where deals are the order of the day, “no deal” simply implies the status quo ante. Take a simple example. If I drive my car to the garage, determined to secure a deal on a new one, the worst that could happen is that I fail and take my old banger home again.
With Brexit, this is simply not the case. No deal does not mean we return to the world as it was prior to the negotiations. It means a whole raft of rules that regulate our commerce with the EU (and, via it, with many other parts of the world) will simply cease to apply. It’s almost as if my old car died on the way back from the garage.
Some people counter such claims with the idea that, in the absence of an overall Brexit agreement, individual deals with the EU might keep the wheels on the wagon. This assumption too shines out from the pages of the government’s technical reports. Yet consider how such an outcome might come about. A collapse in the negotiations would doubtless lead to bitterness and mutual recrimination. We can already see how some politicians are preparing to blame the EU for a damaging outcome. As for the union itself, no deal would mean that those “withdrawal” issues it had prioritised from the start – the Brexit bill, citizens’ rights and the Irish border – were left unresolved. Why should Brussels start negotiating ways of mitigating the impact of no deal before a satisfactory resolution of these issues?
This is why we have focused our analysis on what we have termed a “chaotic Brexit”: a no-deal situation where few if any mitigating deals have been struck with Brussels. This would be the reality of no deal. Whatever the merits of trading on World Trade Organisation terms (and they are overstated by Brexiters) over the longer term, our report makes clear that the WTO provides little or no shield against short-term disruption. The issues would be about day-to-day trading arrangements, about access to supplies of everything from blood to nuclear isotopes, to the components needed for a variety of manufacturing processes.
This is the reality of no deal. Not a glorious trading future under whatever rules we choose to adopt. But uncertainty and strained relations with our largest trading partner. Politics sometimes generates outcomes no one wanted. In this case, politicians would be well advised to prevent it doing so.
• Anand Menon is director of The UK in a Changing Europe and professor of European politics and foreign affairs King’s College London