What a ‘no deal’ Brexit will mean

On 29 March 2017, the Prime Minister informed the European Commission that the UK intends to leave the EU. Under EU membership rules that means that the UK will quit the EU on 29 March 2019 – with just two years to negotiate a new deal to govern our relationship with Europe.

But it’s clear the Tory government has failed to prepare properly for the negotiations. That means the UK could crash out the EU with no deal at all.

A ‘no deal’ scenario would be a disaster for Scotland and the UK as a whole. Here’s why.

Despite claims Brexit would mean more money for our NHS, the Chancellor has admitted that the cost of a ‘no deal’ Brexit will mean less money for public services.

Philip Hammond, the Tory Chancellor, has said: “Every pound we spend on contingent preparations for a hard customs border is a pound we can’t spend on the NHS, social care, education or deficit reduction”.

Yet, in September Boris Johnson repeated the lie that leaving the EU would mean £350 million extra for the NHS. The Foreign Secretary said: “Once we have settled our accounts, we will take back control of roughly £350 million per week.” The head of the UK Statistics Authority, Sir David Norgrove, said this was a “clear misuse of official statistics’.

Food prices will be pushed up.

Without a Brexit deal, the UK would have to apply World Trade Organisation (WTO) rules, meaning new tariffs on imports from Europe. According to the National Institute Economic Review, a no deal Brexit could add up to £930 a year to household food bills.

Without a deal, our fellow EU citizens would face an even more uncertain future – if they were to leave that would be bad for businesses and public services.

In Scotland, over a quarter of small businesses employ EU citizens from outside the UK, in areas like the Highlands, this rises to over 40 per cent. Scottish Government research has found that EU nationals working in Scotland contribute £4.4 billion to our economy.

An estimated 20,000 EU nationals also work in our public services, including the NHS. Figures from the Nursing and Midwifery Council have found that the number of EU citizens leaving the nursing register has gone up 67 per cent in the last year.

If the UK government places a charge on EU citizens receiving the settled status they require to stay in the UK, the Scottish Government will pay this charge for those who work in Scotland’s public services.

Leaving the EU with no trade deal would cost the UK economy £11,500 for each and every working person.

A report by Rabobank has found that a no deal Brexit would cost the UK economy £400 billion between now and 2030 or £11,500 per UK worker.

Research by farming experts has suggested that farmers’ incomes could fall by half following Brexit.    

Farming experts at the Agriculture and Horticulture Development Board have estimated that leaving the EU with no deal could see the average farm income fall from £38,000 per year to £15,000.

The Chancellor has admitted that it’s “possible” that leaving the EU without a deal would halt all flights between the UK and EU countries.

Currently, an EU airline can fly between any two EU places under the Open Skies agreement. When the UK leaves the EU this agreement will no longer apply, unless a new deal is negotiated.

Philip Hammond has told a House of Commons committee that, “It is theoretically conceivable that in a no deal scenario there will be no air traffic moving between the UK and EU on the 29th March, 2019.”

Research funding for scientists through the Horizon 2020 programme would cease.

UK researchers and universities are currently eligible to take part in and receive funding in the Horizon 2020 programme. Horizon 2020 is the EU’s flagship research and innovation programme and will distribute €80 billion of funding between 2014 and 2020.

The European Commissioner for Research, Innovation and Science, Carlos Moedas, has confirmed that, “…if the UK withdraws from the EU without concluding a withdrawal agreement they may be required to leave the project and no longer receive funding.”

Across the UK, up to 75,000 jobs could be lost in the financial services sector.

Financial and business services is a key growth sector, employing 217,400 people in Scotland, with 51 per cent of jobs concentrated in Edinburgh.

Leaving the EU without a deal would mean that the UK would lose special ‘passporting rights’ that allow banks to operate across the EU. The Bank of England has estimated that up to 75,000 jobs could be lost if this happens.