What is a No Deal Brexit - also known as an “Australian-style” deal - European Movement
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What is a No Deal Brexit - also known as an “Australian-style” deal

A no deal Brexit will happen if the UK fails to agree a trade deal with the EU prior to the end of the exit transition period. This is currently scheduled for 31st December 2020. The transition period can only be extended if the UK requests more time for negotiations before 30th June 2020. If we have no trade deal in place with the EU by the end of transition, on 1st January 2021 we will switch to operating on World Trade Organisation terms with the EU. This means the introduction of tariffs and non-tariff barriers, e.g. regulations for goods and services.

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In 2019 the government conducted an impact assessment for a no deal Brexit scenario to identify likely worst-case scenarios. This was carried out under the codename Operation Yellowhammer, and the government published the Yellowhammer report, somewhat reluctantly, in September 2019. Risks identified in the document included shortages of medical supplies, food shortages with reduced choice and higher prices, and the potential for civil unrest.

In addition to the potential outcomes listed in the Yellowhammer document, there are many other probable or known consequences of a no-deal Brexit.

 

What does a no deal Brexit mean for our NHS?

Staffing shortages

The NHS is heavily reliant on workers from the EU. In 2018 NHS England needed 10,000 doctors and 20,000 nurses from EU27 states, but since the 2016 referendum it has become increasingly difficult to recruit and retain staff from the EU as workers concerned about an uncertain future choose to leave the UK. In London up to 15% of positions are waiting to filled, and nationwide the figure is around 10%. There are simply not enough UK medical professionals to meet demand.

Medical supplies

The Yellowhammer report acknowledges that a no deal Brexit would lead to shortages of medicines and other medical equipment. For example, insufficient radioisotopes in the UK would impact the availability of certain cancer treatments.

Joint working

Having left the EU, the UK has already lost its position within the European Medicines Agency, which has relocated from the UK to the Netherlands. Further opportunities for joint working in the medical sector could also be lost with a no deal Brexit. Thanks to our transition status, the EU recently gave the UK the opportunity to participate in its shared procurement scheme for emergency sourcing of ventilators. Unfortunately, the government did not take advantage of this offer, but in the event of a no-deal Brexit this kind of offer would simply not be available.

 

What does a no deal Brexit mean for our food supply?

Distribution and borders

30% of the food consumed in the UK is imported from the EU. Processes for delivering food from the EU to the UK have been designed around the single market arrangement, where lorries simply disembark at the port without extensive delays for checks. Delayed shipments could lead to food deteriorating en route and less food on supermarket shelves. Since Covid-19 arrived in the UK we have seen what food shortages look like, and we have experienced first-hand the effects of panic buying.

For food exported from the UK to the EU, a no-deal Brexit would also mean new tariffs, which could make it extraordinarily difficult for UK companies to achieve competitive pricing, for example dairy products could have a tariff over 35% applied.

Workers

Farmers in the UK need thousands of workers to help get crops from the field to the supermarket shelf. Under current immigration proposals, the majority of these workers would simply not be allowed to come to the UK for work. The idea that these roles can easily be filled by UK workers has been proved to be a fallacy from the recent recruitment drive in the midst of the Covid-19 crisis. Thousands of people signed up for the Feed the Nation scheme, yet only a relatively small percentage were both suitable for and willing to take on the jobs available.

 

What does a no deal Brexit mean for the economy?

The UK economy has long been feeling the effects of the 2016 referendum result. Immediately before the vote to leave the pound was worth €1.32. As at April 2020 the exchange rate stood at €1.14. The Bank of England (Gertjan Vlieghe) has assessed the damage of Brexit to the UK economy at a loss of 2% of GDP which equate to £40 billion per year – or £800 million per year – considerably more than the Leave campaign’s promised savings to be given to the NHS. This is all before a no deal Brexit comes into effect. The Organisation for Economic Co-operation and Development estimated in 2019 that a no deal Brexit would reduce the UK’s economic growth by 3% and trigger a recession. The impact of Covid-19 will of course make the economic situation considerably worse.

The consequences of a no deal Brexit are severe enough on their own. Set against the backdrop of the Covid-19 pandemic they could be disastrous. Our message is clear. Deal with one problem at a time. Extend the transition period. Avoid a no deal Brexit.

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