YOUR NO DEAL SURVIVAL GUIDE
From house prices and healthcare to food and foreign travel, the truth about what leaving without a deal would REALLY mean...
WE have heard grim warnings about empty shops, gridlocked ports and even the taps running dry as chemicals used by British water companies to purify the supply are held up in transit. Such doom-laden predictions in the event of No Deal might seem familiar to some. Before the referendum, Remainers claimed that a vote to Leave would have similarly terrible consequences – yet few of these have materialised. So, are the awful warnings of a No Deal Brexit merely a rerun of Project Fear, or should we be concerned?
WHAT IS THE THREAT TO JOBS?
FEW economists believe that a No Deal Brexit would boost the economy in the short-term. The bank Credit Suisse predicts it would lead to a short recession in which the economy would contract by between 1-2 per cent. Mark Carney, the governor of the Bank of England, recently revised earlier forecasts to predict that the economy would be between 2 and 3.5 per cent smaller within three years of a No Deal.
Other forecasters envisage contractions of about 0.8 per cent or the economy remaining flat. To put this into context: after the 2007 financial crash, the economy shrank by 6.3 per cent. However, all these predictions should be treated with caution given how wrong the forecasts before the referendum proved to be.
In May 2016 the Bank of England predicted that the economy would shrink by up to 6 per cent and unemployment would rise by between 500,000 and 800,000 within two years of a Leave vote. In the end, unlike several countries in the eurozone, the British economy has grown. Unemployment has fallen to its lowest level in decades, dipping below 4 per cent for the first time since the early 1970s.
CAN I STILL GO ABROAD?
IF you are booked on a European holiday after next Friday, don’t panic. The EU has agreed UK citizens will be able to visit EU nations visafree for periods of up to three months, even in the event of No Deal.
However, ensure that your passport has more than six months left before it expires: at the moment, EU countries require only that your passport is valid for the duration of your stay.
From 2021, Britons wanting to visit Europe may have to do so under a visa-waiver scheme known as ETIAS, the EU Travel Information and Authorisation System. Like America’s ESTA system, this would involve an online application. It would cost €7 (£6.09) and last for three years.
Planes, trains and ferries will continue to operate. The EU has already agreed that UK airlines will continue to be able to fly to EU destinations for at least 12 months, by which time a more permanent solution can hopefully be found.
British airlines might not be able to fly from one EU destination to another, but this will affect only a small number of flights.
The EU has also announced that British passengers will not face extra security checks. A more pressing problem for UK travellers is the strike of French customs officers which has led to delays for Eurostar passengers and to long tailbacks on the M20. This, needless to say, has nothing to do with Brexit.
WHAT ABOUT GETTING HEALTHCARE ABROAD?
WHAT British tourists are being advised to do is to take out travel insurance. While the Government is committed to staying within the European Health Insurance Card ( EHIC) blue- card scheme after Brexit – just like Norway – the situation is less clear what happens in the event of a No Deal Brexit.
The Government believes individual agreements may need to be made with each country, are unlikely to be completed in time.
As for pets, the EU operates a Pet Travel Scheme for travellers from non-EU countries, but in the event of No Deal, Britain will become an ‘unlisted third country’.
This means that you should be prepared to take your dog or cat to the vet four months in advance of travel for microchipping and rabies vaccinations. A blood sample will also need to be sent to an EU-approved blood-testing laboratory for a certificate showing the vaccination was successful. Travellers to EU countries will also have to keep a close eye on their mobile phone use.
At present, British phone-users are protected from high roaming charges thanks to EU legislation. In the event of a No Deal this will cease.
In September, the four largest phone operators (Vodafone, EE, Three and 02) all said they had no immediate plans to increase roaming charges for British customers travelling to the EU.
WILL I NEED A NEW DRIVING LICENCE?
ORDINARY motorists (as opposed to commercial drivers) will retain the basic right to drive with a valid licence on the roads of EU countries under the 1968 Vienna Convention on Road Traffic. At worst, Britons taking their cars abroad will have to buy an international driving permit, which costs £5.50 from the Post Office. They will also be required to obtain a ‘green card’ from their insurers to extend cover to EU countries. At present, UK motorists are automatically covered for third party claims when driving in other EU countries.
WILL ALL PRICES RISE?
UNDER No Deal, Britain would have to impose a new set of tariffs that would apply to goods entering the UK from all countries, including those in the EU. It could not ‘ pick and choose’ tariffs for the same goods – such as beef – coming from different countries. Last week, the Government announced it would
slash duties on most goods entering the country. Ministers said that 87 per cent of goods would be zerotariff, keeping many prices low.
Tariffs would remain high on certain goods including lamb and dairy products, to protect British farmers. French cheese would therefore almost certainly rise in price. Some foods would incur lower tariffs – such as beef from Australia or America. It is easy to overestimate the effect of this on prices in the shops. While some European cheeses could theoretically incur a 40 per cent tariff, that does not mean the shop price would rise by 40 per cent.
WILL TAPS RUN DRY?
LAST November it was reported that Michael Gove, the Environment Secretary, and Matt Hancock , the Health Secretary, had both decided to support Theresa May’s deal after learning in a Cabinet briefing that water supplies could run low within a few days of a hard Brexit.
Water companies rely on chemicals and gases to purify the water supply. These are often imported from EU countries on a ‘just-intime’ basis and it has been reported that they are harder to stockpile owing to their volatility.
Yet within days of the story, Thames Water chief executive Steve Robertson poured cold water on these fears, saying: ‘ We have no doubt that there will be adequate supplies of the chemicals needed ... there will be no disruption of water supplies in the UK.’ Your first cup of tea will be fine the day after No Deal.
WHAT ABOUT MEDICINE?
THERE have been many warnings about medicines running out – among the most serious has been the suggestion that British diabetics, including the Prime Minister herself, could run out of insulin.
Britain produces only a small amount of insulin. Yet the Government has taken measures to ensure that supplies will not run out. In December, Mr Hancock said the NHS had become ‘ the world’s largest buyer of fridges’ as it prepared to stockpile six weeks’ worth of medicines.
Health minister Stephen Hammond said last month that 7,000 prescription drugs were subject to No Deal planning and the companies who supply them had been asked to stockpile a six-week supply.
Even the worst traffic jams at Dover are not expected to hold up lorries for six weeks. Drugs that have regulatory approval now will not lose this approval after No Deal. Moreover, the NHS regularly deals with shortages in particular medicines. Last autumn, for example, manufacturing difficulties caused a shortage of Epipens – devices used by people with diabetes to inject themselves with insulin. Patients, nevertheless, still retained access to treatment.
WILL HOUSE PRICES TAKE A TUMBLE?
LAST September, Mr Carney warned that house prices could drop by 35 per cent in the event of a No Deal. However, the Bank of England governor soon qualified the reports to say instead that it was merely the most extreme scenario for which the Bank was preparing.
House-price worries featured before the referendum too, with the Treasury publishing a study shortly before the poll claiming a Leave vote would send house prices tumbling by between 10 and 18 per cent relative to their performance under Remain. According to Halifax, prices are now 10.6 per cent up on June 2016.
Given that prices have trebled in 20 years, many would argue that a modest fall would not be such a bad thing, helping younger people to get on the property ladder.
WHAT IF I LIVE ABROAD?
BRITONS living in other EU countries need not panic: the EU has confirmed they will be allowed to continue living there in the event of No Deal.
This depends on Britain similarly respecting the rights of EU citizens living in Britain and the Government has indicated that it will do so.
EU nationals living in Britain will have to register under the so-called UK Settlement Scheme, but ministers have dropped an earlier proposed £65 fee after a public outcry.
Britons who do not currently live abroad, however, will no longer have the automatic right to settle in EU countries in the event of No Deal. In future, even in the event of a Brexit deal, it is likely they will require visas to live or work there.
In addition, UK nationals living in EU countries will have those rights only in the country in which they are already living. If you are currently resident in Spain, for example, you would have no automatic right to go and live in Germany.
UK expats’ rights to healthcare should be protected in the event of a No Deal Brexit.
The Government has passed legislation to allow it to continue reimbursing EU healthcare systems for treatment of UK citizens resident in their countries.
Individual EU countries have made preparations for a No Deal Brexit: Spain, for example, has passed a royal decree guaranteeing the rights to healthcare of UK citizens living in Spain until at least the end of 2020.