What is a no-deal Brexit, and what might happen as a result?

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With just over 100 days to go until the UK is due to quit the European Union, the Government is stepping up planning for a no-deal Brexit.

Theresa May and the vast majority of MPs from all sides of politics have attempted to downplay the risk of this occurring after March 29, saying there is no consensus to drop out without an agreed Withdrawal Agreement.

But Westminster is suffering from political paralysis and the Prime minister’s Withdrawal Agreement seems likely to be voted down again when MPs vote in mid-January unless there are changes/concessions from Brussels.

Theresa May
Prime Minister Theresa May (Dominic Lipinski/PA)

On March 29 the UK would quit the EU without a withdrawal agreement with the European Union covering issues including the Irish border, expats’ rights in Europe or a future trade deal, among other things.

– What will happen if Britain leaves the EU without a deal?

Either a cataclysm of Biblical proportions or a minor hiccup on the path to self-determination, depending on your point of view.

– Who is concerned?

Vegetable growers warning
Farmers are among those who have warned about a no-deal Brexit blocking access to export markets (Dan Law/PA)

– Hang on, medicines?

Many drugs like insulin that are vital to Britons’ health are manufactured partly or entirely abroad, including in the EU. There have been warnings timely imports of perishable substances could be hindered by increased customs checks at British borders. Ministers are drawing up plans to fly in vital drugs and give priority to lorries carrying medical supplies at gridlocked ports.

Medicines cost
Pharmaceutical firms have been told to stock six weeks’ supply of some imported medicines over fears they may be held up at the border (Julien Behal/PA)

Theresa May has used the prospect of a no-deal Brexit, and the damage it could cause, as a carrot/stick to convince sceptical MPs to back the Withdrawal Agreement in a vote. This follows more than 100 technical papers on no-deal planning released by departments in the summer.

– Has it worked?

Theresa May
Theresa May’s Withdrawal Agreement has proven hugely unpopular (David Hughes/PA)

– What has to happen to get us to that stage?

Not necessarily very much at all. If Theresa May’s hugely unpopular Withdrawal Agreement is voted down by MPs in January, and no consensus alternative can be reached in the bitterly divided Commons on an alternative, no-deal would effectively become the default.

– Can the effects be mitigated?

Some MPs, reportedly including Cabinet ministers, have suggested a “managed no-deal Brexit”, in which there is a two-year transition period after March 29 – as with the Withdrawal Agreement – which would give us more time to be ready to counter the negative impacts.

The Bank of England
The Bank of England has pained a grim picture of the possible effects of a no-deal Brexit (Kirsty O’Connor/PA)

No. Some Brexiteers argue that many of the warnings are overblown and part of “Project Fear” to either stop Brexit altogether or keep the UK in a closer relationship with the EU than they would like. Others simply think they are wrong and the UK could drop out of the EU and do global business on World Trade Organisation terms quite happily.

– What do economists say?

Separate assessments from Whitehall and the Bank of England in November painted a grim picture of the impact of a no-deal Brexit on the UK economy. The Bank warned Britain could be tipped into a recession worse than the financial crash, with an 8% cut in GDP, unemployment surging by as much as 7.5% and house prices falling by almost one-third. Meanwhile, a cross-Government analysis found the UK economy would be 9.3% smaller after 15 years if Britain leaves without a deal.

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