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The government must be clear about the difficult realities of a no-deal Brexit

Joe Marshall says the government must spell out the trade-offs involved with a no deal Brexit

With little time left for the UK and the EU to secure a deal, Joe Marshall says the government must spell out the trade-offs involved with a no deal Brexit – and prepare for that reality

The odds of a no deal are rising. The prime minister insists it would be a ‘good outcome’ for the UK, and has said the UK is prepared to walk from Brexit talks on the 15th of October.

Some in government, who favour the regulatory freedom of a no deal Brexit, would prefer this outcome. Fishing rights and state aid, the two main stumbling blocks in negotiations, require concessions on access to fishing waters and limits on the financial support the government can give business. At the same time the government’s incendiary Internal Market Bill – which could see the UK breach the Withdrawal Agreement – could well jeopardise the chances of a deal.

Whatever the outcome of negotiations, the UK will leave the single market and customs union at the end of the year, resulting inevitably in new costs and bureaucracy when trading with the EU, including customs checks, weaker access to the EU market and new regulatory burdens. Ever since Boris Johnson ditched Theresa May’s plans and pivoted towards a more distant trading relationship with the EU, the difference between a deal and no deal outcome has narrowed. But this doesn’t mean walking away from negotiations is the easy option – and, for some, a no deal Brexit would be particularly difficult. 

If the government is serious about ending the transition period without a deal, it needs to spell out clearly the trade-offs involved and not shift the blame for the resulting disruption

Tariffs will hit certain businesses – like sheep farmers and car manufacturers – hard   

A no deal brexit would result in tariffs on goods traded between Great Britain and the EU. These additional costs could make some industries unviable in their current form.

Many UK sheep farmers have narrow profit margins and sell a high percentage of exports into the EU; which is the destination for seven of the top 10 British lamb exporters. Without a deal, tariffs equivalent to around 76% would be imposed on some cuts of lamb. The Welsh industry is particularly vulnerable, with NFU Cymru arguing that farms will need additional government support to survive, on top of the large annual subsidies they already receive under the common agricultural policy.

Car manufacturers would face tariffs of up to 10% when selling cars to the EU, with Nissan warning in June that its Sunderland plant could become unviable in a no deal. Other manufacturers may follow suit.

Kent will become a lorry park

The government’s own reasonable worst case planning assumptions suggest that in a no deal 30-50% of lorries at the key channel ports could be unprepared for new customs checks and that traffic flow through the vital short channel straits could be reduced by 60-80%. The Road Haulage Association has put the chances of ‘chaos in Kent’ at 80%.

The government is taking steps to limit disruption, including phasing in customs checks on the British side of the GB-EU border, providing funding to help businesses and customs agents prepare and developing contingency plans for priority goods like pharmaceuticals. To avoid gridlock, it is planning a new ‘Smart Freight Service’ to check hauliers have the correct paperwork before they head to the ports and try and stop unprepared lorries entering Kent. However, this service is not yet ready.

Even so, the government plans to revive ‘Operation Brock’ – part of last year’s no deal preparations – which could involve lorries queuing for 15 miles along the M20 and a new 27 acre holding site at Ashford [1].

Shoppers will face higher costs if there is a no deal Brexit

Faced with significant interruption to the key English Channel supply routes, shoppers could face less choice on the shelves, at least in the short term. Heading into no deal in winter, when the UK is most dependent on food imports (often on a just-in-time basis), only heightens this risk.

Even if traders and border systems are generally ready and supply disruption is limited, consumers may still face higher prices. The Bank of England predicted in 2018 that a disruptive Brexit could see sterling fall by around 15% against the euro[2], making imports more expensive. Add to that an average tariff of 5.7% on UK imports[3] and the costs of new non-tariff barriers (like customs checks), and many businesses will have no choice but to put up prices, at a time when many will be grappling with the financial impact of the coronavirus crisis. 

No deal would lead to the hardest possible border in the Irish Sea

Under the Northern Ireland protocol, the border for goods moving from GB-NI will look very similar to goods moving between GB-EU – with no deal resulting in the most intensive checks. If the UK and the EU don’t agree a zero-tariff free trade agreement, the protocol says that goods ‘at risk’ of moving from Great Britain into the EU through Northern Ireland will have to pay tariffs.

The joint committee – the UK-EU body responsible for overseeing the implementation of the Withdrawal Agreement – must determine the criteria for judging goods not ‘at risk’; if no decision is made, the legal default is that tariffs will apply on all goods moving GB-NI. To guard against this, the UK has said it will take powers to decide its own definition – potentially in breach of its international obligations. But this would still mean tariffs on at least some goods, and would not remove any other barriers to trade; goods travelling from GB to NI will still face the most stringent health and customs checks if no FTA is agreed.

Going back to the negotiating table will be hard if Brexit talks collapse

A no deal is not a done deal, and the UK and EU are still going to have to cooperate on issues such as trade, security and the coronavirus beyond December. The UK may want to negotiate bilateral agreements with individual EU members on issues such as the recognition of professional qualifications and social security coordination. At some point in future, the UK will likely try to restart trade negotiations with the EU. An acrimonious no deal is likely to make future negotiations much more difficult.

It would also make managing a no deal harder, as the EU would be less likely to offer unilateral measures to help keep lorries flowing, flights in the air and recognise UK food standards – needed to keep many UK food exports flowing. Securing favourable EU decisions on data sharing and UK access to parts of the EU’s financial services market would also be less likely.

With less than 100 days to go until the end of the transition period, there is little time left to reach an agreement with the EU. If the UK government is serious about walking away from negotiations on 15th October, it needs to acknowledge the trade-offs involved, and prepare for them.


  1. Department for Transport, Proposed legislative amendments on enforcing Operation Brock, 3 August 2020, retrieved 21 September 2020,
  2. Bank of England, EU Withdrawal Scenarios and monetary and financial stability: a response to the House of Commons Treasury Committee, November 2018,
  3. Department for International Trade, Public consultation: MFN Tariff Policy – the UK global tariff: government response and Policy, 19 May 2020,



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