|Part of a series of articles on|
(withdrawal of the United Kingdom from the European Union)
United Kingdom portal|
European Union portal
|Part of a series of articles on the|
United Kingdom portal|
European Union portal
A no-deal Brexit is the potential withdrawal of the United Kingdom (UK) from the European Union (EU) without a withdrawal agreement. Under article 50 of the Treaty on EU, the Treaties of the European Union cease to apply once a withdrawal agreement is ratified or two years have passed since a member state has indicated its will to leave. The two-year period can be extended by unanimous consent of all member states, including the one wishing to leave.
The UK and EU have negotiated such a withdrawal agreement, but the UK House of Commons has on three occasions voted against ratifying it. The proposed agreement contains provisions concerning citizens' rights,[a] border arrangements, money liabilities,[b] and resolution of disputes.
Without such an agreement in place at the end of the period specified in article 50 Treaty on European Union, EU law and other agreements would cease to apply to the established interactions between the UK and the rest of the EU. Additionally, UK interactions with non-EU countries, which until now have been governed by EU agreements with those countries, may need to be renegotiated.
Short-term (90-day) cross-border travel for tourism is expected to continue as at present, albeit with some inconvenience to aviation schedules. While trading of goods (though not services) could continue to operate under World Trade Organization (WTO) most favoured nation rules, some significant disruption to established trade flows is anticipated and the UK and the EU have prepared agreements and (short-term) understandings for the more serious risks anticipated to arise. Operation Yellowhammer is the codename used by the UK Treasury for cross-government civil contingency planning for the possibility of a no-deal Brexit.
In May 2019, the Speaker of the House of Commons advised that while a no-deal exit on 31 October 2019 was the current default position in law, it was not credible that Parliament could be deprived of the right to intervene should it wish to do so.
In July 2019 Boris Johnson became Prime Minister of the United Kingdom and Leader of the Conservative Party. The Department for Exiting the European Union, which had previously been responsible for Brexit negotiations, was refocused to concentrate on no-deal planning, with an additional £1 billion in funding for preparations for a no-deal Brexit. Johnson appointed Michael Gove to the Cabinet with the responsibility for co-ordination of planning across Government Departments for a no-deal Brexit, declaring that Gove would "turbo-charge" the UK's preparations for a no-deal Brexit on 31 October.
In August 2019, The Guardian reported that British diplomats would pull out from the EU's decision making meetings "within days", under plans being drawn up by Downing Street. That newspaper also said in the same month that any attempt to bypass MPs could create a constitutional crisis. On 21 August 2019, Angela Merkel offered and Boris Johnson accepted a suggestion that the UK Government should come up with a viable alternative to the backstop, and on the same day the President of France Emmanuel Macron indicated that no deal was the most likely Brexit outcome due to the inability of the UK to accept the withdrawal agreement. At an interview with the BBC at the 45th G7 summit in late August 2019 Johnson suggested that the chances of achieving a Brexit deal were now "touch and go". He had previously stated that the odds of a no-deal exit were "a million to one". On 28 August 2019, the Johnson ministry reopened negotiations on the withdrawal agreement, but set as a pre-condition that the Irish backstop must be scrapped before doing so, a condition to which the EU had declared it would not agree.
On 30 October 2019, the day named as "exit day" in UK legislation was changed to 31 January 2020 at 11.00 p.m.
The UK's recurrent contributions to the EU budget will cease. (A House of Commons briefing paper issued in June 2016 stated that the average net contribution for the years 2013 to 2017 was £7.9 billion per annum.) The withdrawal agreement negotiated by Prime Minister Theresa May included an understanding that the UK would need to pay a "divorce" bill of £39 billion for previous and long-term commitments. On 25 August 2019 it was reported that a UK government legal team had advised that the amount due should a no-deal Brexit eventuate would be £9 billion and possibly as low as £7 billion.
Analysis by Her Majesty's Treasury in 2016 predicted that a no-deal Brexit, whereby the UK left the EU and traded with the EU only on WTO terms without any new deals being negotiated, would result in a 7.5% decrease in GDP after 15 years for the UK (relative to where it would otherwise have been, were the UK to have remained a member of the EU). In April 2019 the International Monetary Fund published analysis showing that, in the event of a no-deal Brexit occurring during 2019, the UK's GDP would be 3.5% smaller by 2021 than it would have been had a withdrawal agreement been made during that year (2019). The IMF also predicted a 0.5% reduction in GDP relative to where it otherwise would have been for the rest of the EU by 2021 as a result of a no-deal Brexit. In June 2019 the Office of Budget Responsibility published analysis predicting that the economy would shrink by 2% of GDP by 2021 if a no-deal Brexit occurred during 2019, but where the UK's exit was not "disruptive or disorderly".
Economists at think tank The Policy Exchange have criticised the Treasury, IMF and OECD forecasts for their reliance on a gravity model with what they say are incorrect assumptions. Specifically, these forecasts rely on the comparison between firstly the average gain in trade between EU countries and secondly the average gain in trade between EU countries and the rest of the world. For example, the Treasury's forecast shows that trade in goods has increased 115% more between EU countries compared to trade between the EU and the rest of the world over the timeline of the EU. The authors point to various problems with this, including that 115% is the average across all EU countries and UK specific analysis leads to significantly lower number in the 20% to 30% range, that currency fluctuations should reduce some of the impact of this, and that UK exports to the EU as a percentage of its total exports have been falling rapidly since 1999.
In 2016 Patrick Minford predicted that a 'Britain Alone' scenario in which Britain left the EU, traded with the EU only on WTO terms, and unilaterally removed all tariffs, would result in a gain of 4% of GDP relative to where it would otherwise have been had the UK remained in the EU. Thomas Sampson, Swati Dhingra, Gianmarco Ottaviano and John Van Reenen of the Centre for Economic Performance criticised this analysis as being based on outdated information and analyticial models, and unjustified assumptions.
A report prepared by the Central Bank of Ireland in August 2019 indicated that the City of London would be "largely unaffected" by a hard Brexit, even if it were to have an "adverse" impact on the rest of the country. The report said that the City's financial services industry was sufficiently strong to withstand the impact of a no-deal Brexit and would remain "rich".
Under the EU Single Market, freedom of movement allowed EU citizens to travel, live and work in any other member state. This freedom would have been curtailed by a no-deal Brexit, but in early September 2019 it became clear that Home Secretary Priti Patel would announce a liberalisation of rules such that in the event of a no-deal Brexit EU citizens arriving and joining the Settlement Register by the end of 2020 would be able to remain in the UK until 31 December 2023.
On 28 July 2019, Groupe PSA (owners of Vauxhall Motors) told the Financial Times that a no-deal Brexit could, if Brexit makes it unprofitable, result in the closure of its Ellesmere Port plant, with serious consequential impact on local suppliers.
On 30 July 2019, Helen Roberts of the National Sheep Association in Wales told The Guardian that it would be "absolutely catastrophic" to leave with no-deal and could lead to civil unrest among sheep farmers. Minette Batters, the president of the National Farmers Union, said there would be no market for 40% of the UK's lamb meat in the event of a no-deal Brexit. The Guardian also reported research commissioned by the Agriculture and Horticulture Development Board and Quality Meat Scotland that found that combined beef and sheep meat exports to the EU could decline by 92.5%, with the lamb export trade "almost completely wiped out".
The UK would be able to make new international free trade deals straightaway following a no-deal Brexit.
Delivering a research study on the impact on worldwide exports to the UK, the director of international trade and commodities at UNCTAD considers that "Brexit is not only a regional affair. Once the UK has left [the EU], it will alter the ability of non-EU countries to export to the UK market".
According to UNCTAD a no-deal Brexit could impact third world countries, including in Africa. However the no-deal Brexit could provide gains to China. A no-deal Brexit could in one hand reduce EU exports to the UK by $34 billion and from Turkey by $2 billion, and on the other could increase Chinese exports by $10 billion and US exports by $5 billion.
A no-deal Brexit would have immediate repercussions for many developing countries’ exports, with the UNCTAD research raising the specter of significant disruption and economic harm for developing countries whose exports are highly reliant on the UK market and/or are current beneficiaries of EU preferences.
In the run up to the anticipated Spring 2019 Brexit date, the Department for Exiting the European Union (DExEU) and the Civil Contingencies Secretariat developed preparedness and contingency plans for the possibility of a "no-deal" Brexit, codenamed Operation Yellowhammer – the emergency co-ordination plan. In August 2019, it was reported that the Cabinet Office was "not able to confirm" that Operation Yellowhammer is to remain available for an Autumn Brexit. On 18 August 2019, a leak revealed that the policy continues to exist and is being updated.
Since Boris Johnson became UK prime minister in July 2019, there have been changes for Brexit planning. Under Michael Gove, significant additional emphasis and funding was being given to no-deal preparations.
Transport links are likely to be affected by additional procedures required at border crossings, leading to possible bottlenecks and congestion. Some measures were taken to mitigate the effect of possible problems, including additional ferry capacity. Additionally an enhanced plan, Operation Brock, was prepared to cope with additional traffic delays on the M20 motorway to the Channel Tunnel and Channel ports with Operation Fennel used to manage overall traffic congestion in Kent.
It was said in July 2019 that any issues with train operators and driver certifications (to operate/continue to operate cross-border train services) needed to be resolved.:7
At the end of July 2019, in a statement headlined "Brexit and the UK haulage industry – no deal, no jobs, no food", the (British) Road Haulage Association said that "A no-deal Brexit will create massive problems for international hauliers – whether UK or mainland Europe based".
Aviation would be particularly affected if the European Common Aviation Area and EU–US Open Skies Agreement no longer applied to the UK after a "no-deal" Brexit, since World Trade Organization rules do not cover that sector, implying that the following day a British plane could not land at an EU airport. UK government said in September 2018 that in case of no deal on aviation, UK would allow EU airlines to use British airports anyway, and expect EU countries to reciprocate. A number of other aviation issues exist, including pan-European air traffic control, service agreements with the EU and other countries, security regimes, and the UK's relationship with the European Aviation Safety Agency.:7 EU—UK flights should not be affected for a time following a no-deal exit, subject to EU and UK respecting reciprocal rights in this area.
The UK National Audit Office (NAO) produced the report The UK border: preparedness for EU exit update in October 2018 and an update in February 2019. These indicated 11 out of 12 critical systems for borders would be at risk were a no-deal exit to occur on 29 March 2019.:4
EU citizens entering the UK for tourism and (some) business and tourism (and vice versa), will not need visas for visits up to 90 days; however significant business travel will require a work permit for each country visited. EU and UK citizens with less than six months to a year on their passports may be advised to renew them. Passports will not be required between Ireland and UK as they are in the common travel area. Citizens from the UK would be unable to use the EU channels in EU airports: the EU channels at UK airports will be repurposed. An International Driving Licence and Green Card may be required for UK citizens to drive in the EU.
In February 2019, it was estimated that the number of customs declarations to be handled for goods leaving the UK would rise from the current 55 million per year to 240 million.:4
The Department of Health and Social Care (DHSC) analysed supply chain, organised stockpiles and additional refrigeration warehouse space. Medicine with limited shelf life cannot be stockpiled; arrangements are in place to prioritise medicines as key goods and a chartered plane would be available for provisioning if necessary. Each clinic and hospital must answer 60 questions each day as part of a sitrep (Situation Report) to confirm they will be able to continue to manage. On 26 March 2016 the Minister for the DHSC indicated it was prepared for a no-deal exit.
In the event of a no-deal exit, EU energy law will no longer apply to the UK. Continuity of supply will be prioritised. For 12 months until new trading arrangements, a temporary scheme will be implemented to import electricity with no tariff.[needs update] The All-Ireland single Electricity Market will no longer apply, although alternative trading arrangements have been outlined and were being pursued, the Government stated in March 2019.
As a member of the EU, the UK is part of the common fisheries policy which, among other things, allows fishermen from other EU countries to access UK waters (and vice versa). In the event of no deal the UK government has stated that, as the UK would no longer be bound by the common fisheries policy, it could deny access to EU Member States fishing vessels, and in September 2018 DEFRA reported that issues were expected in enforcing the UK fishing area to prevent fishing by non-UK vessels.:9–10 The EU has requested that, in the event of no-deal, short term access be provided to EU vessels, and Steven Barclay (Brexit Secretary) informed the Exiting the European Union Select Committee that the UK had agreed to stay in the common fisheries policy until at least December 31 2019.
In September 2018, DEFRA produced a report on Progress implementing EU Exit. Progress was being made getting other countries to accept UK versions of export health certificates, especially in the 15% of non-EU countries accounting for 90% of the UK's non-EU exports.:9–10 There were also concerns about insufficient veterinary staff to process export health certificates.:9–10
In August 2019 it was revealed that local government planning for a No-deal Brexit encompassed the possibility of needing to change legal requirements underpinning the provision of school meals, for example by making them more expensive or less healthy; possibly even discarding the requirements entirely. One council also said that "special dietary requirements may be difficult to meet" and that fresh food might have to be replaced with frozen and tinned goods, while another mentioned the possibility of a return to rationing.
The British Government intends to treat EU citizens already living in the UK as it had proposed in the draft Brexit withdrawal agreement, though there will be some variations. The UK Government is hopeful this will be reciprocated for UK Nationals in the EU. The EU have published a fact-sheet detailing information for UK nationals in the EU.
In August 2019, Boris Johnson communicated that he wants the freedom of movement which allow EU citizens to travel to the UK to be immediately stopped on October the 31st. Those rules applicable till October the 31st will be replaced by new stricter non stated rules.
Metropolitan Police Deputy assistant commissioner Richard Martin stated that a no-deal exit would mean a loss of Europe-wide tools, databases and European Arrest Warrant, which would limit ability to detain foreign suspects in the UK and pursue UK fugitives in the EU. The National Police Chiefs Council asked "prominent individuals" to avoid inciting anger and said 10,000 officers were ready for deployment in the UK in case of conflicts between citizens.
A "temporary permissions regime" (TPR) has been introduced so that in the event of no-deal, European Union banks, insurers and asset managers can simply notify UK financial regulators in order to continue to serve UK customers.
A no-deal Brexit will make UK no longer party to the Motor Insurance Directive. According to Irish no deal preparedness plans, Green Cards will be required by for UK motorists wishing to travel to the EU (and vice versa) – an issue that will particularly affect the heavily traversed Irish border. As a consequence, one million Green Cards were sent to insurance companies and brokers in the Republic of Ireland alone, as part of a 'prudent advance planning' for a possible no-deal Brexit.
The May administration was committed to avoiding a "hard" border[c] and honouring the Belfast (Good Friday) Agreement. However, it was reported in March 2019 that its proposed approach might violate other legal obligations and could be challenged.[d]
In August 2019 it was reported that it was "understood" that a no-deal Brexit could challenge the question of the border between UK and EU on the island of Ireland, necessitating negotiation between the UK with the European Commission and/or the Irish government to jointly agree long-term measures to avoid a hard border.
A forecast made in August 2019 had an expectation of a reduction of 19% in exports from Northern Ireland to Ireland in the event of a no-deal Brexit.
Exiting the EU is expected to cause serious disruption to security relationships built up with the UK and may compromise UK national security. The difficulties are increased significantly in the event of a "no-deal" exit.
In February 2019, The Times reported plans to evacuate the Royal Family from London in the event of rioting following a no-deal Brexit, however neither Buckingham Palace nor 10 Downing Street would comment on the report.
On 13 March 2019, the Department for International Trade released details of temporary tariff rates that would apply to imports if the United Kingdom leaves the EU without a deal. This tariff regime would last for 12 months, then will be reviewed. The new regime increases the percentage of items that are tariff free from 80% to 87%; products that will become tariff-free include jams, jellies and marmalade (currently 24%), oranges (currently 16%), onions (currently 9.6%), peas (currently 8%), and televisions (currently 14%). However, there seems to be no reason to expect these tariffs to be reciprocated and some exporters foresee complete loss of their major markets.
In the event of a "no-deal" exit existing legislation will be used as far as possible to cover any essential contingency measures but a power of last resort is to use the Civil Contingencies Act 2004 to introduce temporary legislation. UK government departments said existing legislation is sufficient.:14
The UK Government has needed to withdraw communication resources with regard to a no-deal exit on 23 March 2019 due to it being out of date.
The UK Government has issued a notice about how data protection law will work if the UK leaves the EU without a deal.
It has been suggested by supporters of Brexit – including Boris Johnson – that, in the event of a no-deal scenario, paragraph 5b Article 24 of the General Agreement on Tariffs and Trade might be used to avoid the need (under WTO rules) for the EU and UK to apply tariffs to their mutual trade. This position has been criticised as unrealistic by Mark Carney, Liam Fox and others, as paragraph 5c requires an agreement with the EU be in place for paragraph 5b to be of use, and would not cover services.
The European Union issued a press release on 25 March 2019 saying that it had prepared for an increasingly likely "no-deal" scenario on 12 April 2019. It has issued 90 preparedness notices, 3 Commission Communications, 19 legislative proposals, and a number of fact sheets for its citizens.
For example, this includes a nine-month temporary measure to allow the negotiation of a long term solution for the rail link between the UK and the continent.
Different laws/waivers, including some under work, are considered, for instance:
The immediate effects of withdrawal (either with or without a ratified treaty) are ending of the UK's membership of the Council of the European Union and the European Commission, and loss of the 73 seats of the UK MEPs in the European Parliament who were elected in the May 2019 European Parliament election in the United Kingdom. The latter will require re-apportionment of those seats among the remaining member states according to the result of the 2019 elections which took into account the Brexit as planned.
Transport between UK and the EU will suffer from long delays, which the parties have made efforts to ameliorate:
In case of no deal Brexit, Austria will offer British nationals living in Austria a free six months delay to apply for a €160 residence permit with simplified rules which will not require speaking German to obtain residency.
Belgium has drafted, in case of no deal Brexit, a bilingual Dutch-French law offering a transition period until December 2020. This time offer the possibility for British citizens to apply for a €57 long-term residence permit, called D-card, but Brexit specific.
Bulgaria will offer British the same rights as EU citizens but requires them to re-register.
Croatia will offer to British nationals a free application for temporary residence upgradeable after no-deal Brexit to a HRK 79.50 resident ID card. Permanent residency is an option for people who have been there 5 years or more.
British authorities have advised British nationals to register with the local authorities.
Czechs did the most generous proposals with a draft law to offer 8,000 Britons living in the country a 21-month exemption from normal immigration laws, till the end of 2020. This offer relies on reciprocity for the 40,000 Czech citizens living in Britain.
France considers that a no deal Brexit (sortie sèche in French) will occur because the withdrawal agreement has not been ratified.
The right of British citizens living in France are ruled by an ordonnance dated 6 February 2019 and by décrets (decrees) dated 2 and 3 April 2019. This includes a 12-month period, assuming reciprocity, to allow British nationals to continue to live in France without titre de séjour. After that, they must have a carte de résident (10-year residence permit) if they have lived in France for more than five years, otherwise one of the titres.
Border controls will be made possible through an ordonnance and a décret of 23 January 2019 and an ordonnance of 27 March 2019 to establish border checks.
An ordonnance of 30 January 2019 will allow the movement of defence goods between France and the United Kingdom to continue.
In July, Greece understood that "Boris Johnson's election as PM of the United Kingdom creates the conditions for a disorderly Brexit". For this reason, according to Varvitsiotis, Greece wants to fix the "list of hundreds of pending issues that we must look at, because if they are not covered by an overall EU-UK agreement, all these agreements must be drawn up on a bilateral, national level. He wants that all actions will respect both the "relations we have but also the relations that we will build from here on."
The economies of both parts of Ireland are expected to be seriously affected by a no-deal Brexit. The EU plans to ensure that the economy of the Republic of Ireland is supported through the crisis with "a huge aid package" from the contingency fund. On 22 July 2019, an EU diplomat told The Times that the bloc would “spend whatever was necessary” to support the Irish government through any disruption of trade. According to the then UK Brexit Secretary, Stephen Barclay, 40% of the Republic's tangibles trade with continental Europe goes via Dover/Calais, which (in a no-deal scenario) is expected to be seriously disrupted.
Eamonn O’Reilly, CEO of Dublin Port, was quoted on 21 March 2019 as indicating the port was "as ready as we can be" for a No-deal Brexit with 8 hectares (20 acres) allocated for the eventuality.
Poland planned a draft law to offer Britons living in Poland a delay from no deal Brexit at midnight on 29–30 March in 2019, until 30 March 2020, to protect their rights by obtaining a temporary residence permit or permanent residence in Poland. Theresa May said: "Almost 1 million Poles make their lives in Britain. That is why securing the rights of Polish and other EU citizens was my priority in the Brexit negotiations.".
The card will be different from a normal residency permit, being a "Brexit" card.
Spain has established a 42-page document of English-language royal decrees containing several chapters:
The Swedish government has adopted certain transitional rules to facilitate British citizens in Sweden in the event of withdrawal without deal or if an agreement is approved too late in order to be legislated. Most are valid for one year.
Because the "EEA EFTA-UK separation agreement" will only apply if the Withdrawal Agreement is concluded between the EU and the UK, a no-deal agreement has also been agreed:
According to the gov.uk, "EEA EFTA no deal citizens'rights agreement" is the citizens' rights agreement with the EEA EFTA states to protect the rights of UK and EEA EFTA nationals who have chosen to call each other' countries home. This would come into effect in a no deal scenario.
Official name of this agreement is "Agreement on arrangements regarding citizens’ rights between Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland following the withdrawal of the United Kingdom from the European Union and the EEA Agreement"
A no-deal Brexit is strongly supported by the Trump Administration, and the United States might benefit from it through changes to the British position on trade and foreign policy, according to an op ed piece by Gaby Hinsliff of The Guardian (UK). U.S. national security adviser John R. Bolton told British Prime Minister Boris Johnson that President Trump wanted to see a successful British exit from the European Union on Oct. 31, according to CNBC. A no-deal Brexit may also offer a possible switch of UK alignment to the US rules rather than to EU rules.
However, Speaker of the House of Representatives Nancy Pelosi (leader of the Democratic Congressional majority) has said that the House will refuse to ratify any US/UK free trade agreement if the stability of the Good Friday Agreement is imperilled.
It is generally assumed that the UK and EU will wish to negotiate a free-trade agreement. Dominic Raab, the UK Foreign Secretary, believes that the UK will be better able to negotiate an FTA with the EU after no-deal Brexit. However the Institute for Government disagrees, pointing out that negotiations in this case will not be under Article 50 terms but under the EU's 'third countries' arrangements which "take place on a different legal basis with a more complicated process and ratification requirements – which is likely to involve ratification in all 27 member state parliaments".