Projected Impact of “No Deal” Brexit Released
In life, there are those who believe that information is a resource that must be shared for the common good and others who believe it to be a source of power that must be closely guarded: the British government is firmly in the second camp. Only the near certainty of losing a vote in parliament on an amendment tabled by (former) Conservative MP Anna Sourby (now a member of The Independent Group of MPs) was sufficient to persuade it to part with its assessment of the economic impact of the “no deal” Brexit that it has been openly flirting with. The 15 page report summarizes information on the consequences of leaving the EU without the transitional period or any deal and makes for bleak reading.
The economy would shrink between 6 and 9% over a 15-year period in the event of a no deal rupture (in line with Bank of England projections); food prices will rise and business failures will be highly likely in Northern Ireland (which voted to remain in the EU, of course).
In the short-term, the flow of goods through the port of Dover would be “very significantly reduced for months” this will lead to major problems on the Kent motorway system and local trunk roads due to queuing freight vehicles. As almost a third of UK food being imported from the EU, price increases are likely and there is a risk of “panic buying” of food causing shortages.
The report notes that only six of the planned 40 international trade agreements with third party states having deals with the EU have been signed currently. Mandatory customs checks are projected to cost UK businesses £13 billion a year and it claims that it is currently impossible to predict the impact of tariffs. Small to medium sized businesses are unprepared for Brexit with only a sixth of 240000 firms new to customs experience (trading within the EU is within a customs union, of course) subscribed for a mandatory economic operator registration and identification number – without it, freight will not be allowed to leave ports in Europe, even if the UK allowed them to pass from the UK side.
Tariffs that could apply to British beef an lamb would be a crippling 70 and 43% whilst finished vehicles would attract a 10% rate. More than 90% of British lamb is exported to the EU.
The UK government has the power to unilaterally end Brexit by rescinding its Article 50 notice, under the Treaty of Lisbon, until the UK actually leaves the EU.