Worse outcome than ‘no deal’ Brexit is ‘difficult to envisage’
IT IS “difficult, if not impossible, to envisage a worse outcome for the United Kingdom” than the country crashing out of the EU without an exit deal, the House of Lords EU Committee warns.
It takes the UK government to task for suggesting that no deal is better than a bad deal, and warns against setting in stone the date when the UK will leave the EU.
It states in a hard-hitting report: “A complete ‘no deal’ outcome would be deeply damaging for the UK. It would bring UK-EU cooperation on matters vital to the national interest, such as counterterrorism, police, justice and security matters, nuclear safeguards, data exchange and aviation, to a sudden halt.”
The UK government is warned against putting in law a commitment that the UK will leave the EU on March 29, 2019, and is instead urged to look at ways of ending Britain’s membership in the union.
Highlighting the potential consequences for trade, the peers warn: “It would have a particularly disruptive impact on cross-border supply chains. The short-term impact on trade in goods would also be grave: the UK’s ports would be overwhelmed by the requirement for customs and other checks.
“There is simply not enough time to provide the necessary capacity, IT systems, human resource and expertise to deal with such an outcome.”
Today’s report flags up fears of higher food costs, stating: “The British Retail Consortium warned that the average tariff on food products imported from the EU would be 22%, with tariffs on Irish cheddar of 44% and on beef of 40%. Its research pointed to potential rises in the price of cheese in the order of 6-32%, on tomatoes of 9-18%, and on beef of 5-29%.”
It was also told that in the dairy sector “non-UK-born staff account for 11% of the processing workforce”.
Having set out major concerns about the impact of a no-deal Brexit, the committee urges the UK government to look at ways to avoid a damaging exit.
Making the case for a time-limited extension of Britain’s EU membership, the peers argue: “While we reiterate our support for the government’s goal of securing a comprehensive agreement by October 2018, the uncertainty over the feasibility of that aim means that the overriding UK and EU interest is now to secure an orderly and legally certain transition, as early as possible.
“To this end, we call on the government, alongside its consideration of the legal basis for transition, to review the options for securing a time-limited extension to the UK’s EU membership that are legally available under Article 50; to open discussions on these options with the EU negotiators; and to report its conclusions to Parliament at the earliest opportunity, and at all events before the end of March 2018.”
Insisting that setting the Brexit date in stone would be a mistake, they say: “The key factor adding to the risk of ‘no deal’ is time – the Article 50 clock is ticking. The closer the UK and the EU get to the deadline of 29 March, 2019, the more damaging a breakdown of negotiations, and a ‘no deal’ outcome, would be.
“Both sides need to show flexibility, and for the UK to compound the rigidity of Article 50 by enshrining the same deadline in domestic law would not, we believe, be in the national interest.”
The peers also say the government should not claim that “no deal is better than a bad deal,” stating: “Given the overwhelming evidence of the destructive effect of ‘no deal’, the government’s assertion that ‘no deal is better than a bad deal’ was not helpful.
“If the two sides were negotiating a free trade agreement from scratch, failure to reach agreement would simply mean a continuation of the status quo – but that is not an option in the case of Brexit, where ‘no deal’ would mean the abrupt cessation of over 40 years of economic, political and legal partnership.
“It is difficult, if not impossible, to envisage a worse outcome for the United Kingdom.”
John Longworth, co-chairman of Leave Means Leave, told the peers that “we are rapidly coming to a position where not only is no deal better than a bad deal, but no deal may well be the very best deal... If there is no progress before Christmas, in order to have adequate time to prepare for a no-deal scenario, we ought to declare before Christmas that we are moving to [World Trade Organisation rules] in March 2019.”
Plaid Cymru peer Lord Wigley said: “Wales is an exporting country. Tearing up our economic links with the single market and customs union after we leave the EU would have a significant impact on our businesses who will then face tariffs and regulatory barriers to trade...
“The answer is to maintain our economic links after we leave the EU by maintaining our current position inside the single market and the customs union.”
A spokeswoman for the Department for Exiting the European Union insisted a deal was within reach, saying: “We are confident of securing a deal which is in the interests of both the UK as a whole and our European partners, and this is what we’re focused on.
“While it is the duty of a responsible government to plan for all scenarios, we are clear that a deep and special partnership with the EU is the most likely outcome.”