Failure to plan for a ‘no deal’ will be a serious dereliction of duty.
The government has said no Brexit deal is better than a bad deal.
This has provoked Westminster’s Foreign Affairs Committee to explore the implications of a such a ‘no deal’. Its report spells out why it believes such an eventuality is a real possibility. These include domestic implications affecting European country politics including elections, potential “bitter and twisted” negotations over the cost of Britain’s exit, the potential of error or miscalculation in the negotiations, and the twin implications of a European Parliament vote on the matter and a Westminster Commons vote. All of this against a backdrop of a short timescale for negotiations.
So it concludes ‘no deal’ is a possibility and therefore a failure for government to plan for such an eventuality will be “a serious dereliction of duty.”
Among the implications is the sudden return of a customs border between Northern Ireland and the Republic of Ireland. Contrasting the Governments desire for a frictionless border with the reality in the event of a no deal it says, “…if the UK leaves the EU with no deal in place, it will also exit the EU’s customs union. This means that even if the UK and Ireland were to maintain complete free movement of people within the UK/Ireland Common Travel Area, there would have to be some form of customs checking arrangement put into place immediately.
Other implications include uncertainty and confusion for UK citizens in the EU and EU citizens in the UK with “considerable uncertainty around issues including their residency rights, access to employment, ability to claim pensions and other social security benefits, and access to healthcare. ” This uncertainty extends to short term travellers and tourists.
On trade it says if the UK leaves the EU with no deal in place—or with a very narrow withdrawal agreement that does not include transitional arrangements or a framework for future relations—it will trade with the EU on World Trade Organisation (WTO) terms. “This would almost certainly involve the immediate imposition of tariffs across a range of sectors, which would have differentiated impact as they are low on many products, such as automotive parts (5%), but high in sectors such as agriculture (30–40%)”
It believes that even if all sides enter into the process with goodwill and the desire to ensure a successful outcome, there are many reasons why the negotiations might fail and that the consequences of such a failure are far from “an exercise in guesswork”. So it says the possibility of a no deal is real enough to justify planning for it.
It says “The Government has produced no evidence, either to this inquiry or in its White Paper, to indicate that it is giving the possibility of ‘no deal’ the level of consideration that it deserves, or is contemplating any serious contingency planning. This is all the more urgent if the Government is serious in its assertion that it will walk away from a “bad” deal. Last year, we concluded that the previous Government’s decision not to instruct key Departments to plan for a ‘leave’ vote in the EU referendum amounted to gross negligence. Making an equivalent mistake would constitute a serious dereliction of duty by the present Administration.”
It then urges the Government to require each Department to produce a ‘no deal’ plan, outlining the likely consequences in their areas of remit and setting out proposals to mitigate potential risks. Making a strategic point, it concludes, such preparation would strengthen the Government’s negotiating hand by providing credibility to its position that it would be prepared to walk away from a bad deal.