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Report warns of dire consequences

Brexit ‘No deal’ would be ‘economic disaster’

Heathrow

Planes may be stranded

Failure to reach a deal on Britain’s exit from the EU could see nuclear power stations shutdown and planes stranded at airports, according to an alarming report.

The consequences of “no deal” will be “widespread, damaging and pervasive”, says research from The UK in a Changing Europe, a group comprising mainly academics. 

Its Cost of No Deal report examines the consequences of the UK failing to strike either an Article 50 or a trade deal with the EU – what is termed a “chaotic Brexit”.

In that scenario, the UK’s nuclear plants may not be able to operate; British airlines might be unable to fly; and both UK citizens in the EU and EU citizens here would find themselves in legal limbo, it says.

A chaotic Brexit would also have serious political and economic implications for Northern Ireland.

Potential uncertainty when it comes to monitoring and implementing rules, notably in the area of the environment, could result in weaker protections.

The report notes that legal chaos could ensure over the enforcement of contracts involving British businesses exporting to the EU. 

It says complex cross-border supply chains would be disrupted, not least because requisite customs checks, tariffs and regulatory barriers will not be in place.

Drugs developed in the UK may not have their approval recognised in other member states and clinical trials would be disrupted.

Professor Anand Menon, director of The UK in a Changing Europe, said: “Our findings show a chaotic Brexit would, at least in the short term, spawn a political mess, a legal morass and an economic disaster. This report makes it clear ‘no deal’ is an outcome the British government must strive to avoid.”

The report shows that a chaotic Brexit might come about in two ways:

A premature Brexit: where talks break down acrimoniously with the UK unilaterally ceasing to pay its EU contributions and ending the supremacy of EU law in the UK with immediate effect

A timed out Brexit: where the talks do not completely break down, but no agreement is reached within the two year period and there is no extension.  

The likely economic impact of no deal includes: a further significant fall in the exchange rate, a consequent rise in inflation, a fall in wages and consumer demand and a fall in business confidence, leading to a slowdown in investment.

The report shows there would be serious political ramifications if a premature Brexit occurs.

It says the government would be likely to blame Brussels and remain backers at home – creating further acrimony with the EU and bitter divisions in British politics. A mutual blame game “will make future cooperation with the EU more difficult”, it says. 

Professor Menon concludes: “No deal doesn’t mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive.”

The report’s contributors are: Professor Catherine Barnard, Dr Michaela Benson, Dr Charlotte Burns, Professor Adam Cygan, Professor Meredith Crowley, Dr Swati Dhingra, Dr Viviane Gravey, Professor Colin Harvey, Dr Carmen Hubbard, Professor Andy Jordan, Professor Hussein Kassim, Professor Simon Marginson, Dr Craig McAngus, Professor Jean McHale, Professor Anand Menon, Dr Louise Merrett, Professor Jonathan Portes, Professor Colin Reid, Dr Thomas Sampson, Dr Nando Sigona and Dr Simon Usherwood.

The group’s former fellows include Laura Cram, professor of European politics at the University of Edinburgh.

The UK in a Changing Europe promotes independent research into the complex and changing relationship between the UK and the European Union. It provides a non-partisan and impartial reference point for those looking for information, insights and analysis about UK-EU relations.

Food and drink unites in call for action

Representatives from 26 bodies from across the UK food and drink supply chain have called for action on 10 key priorities in the negotiations with the EU to protect the UK’s food security and the food and farming sector.

In an open letter they warn that abrupt change would have enormous consequences for the industry, its employees and for the choice and availability of food in Britain.

They represent many thousands of businesses, large and small, responsible for producing, packaging, distributing, serving and selling food and drink. Food and drink is the UK’s largest manufacturing sector and the largest employer in the service sector.

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