‘No-deal’ scenario: What happens if Brexit talks fail?

Higher food prices, grounded flights and City job losses: catastrophic predictions of Britain crashing out of the EU with no deal in place abound despite the more upbeat tone from Friday’s EU summit.

A demonstrator holds up a placard saying “Stand together Stop Brexit” at an anti-Brexit protest in Trafalgar Square in central London on June 28, 2016.
EU leaders attempted to rescue the European project and Prime Minister David Cameron sought to calm fears over Britain’s vote to leave the bloc as ratings agencies downgraded the country. Britain has been pitched into uncertainty by the June 23 referendum result, with Cameron announcing his resignation, the economy facing a string of shocks and Scotland making a fresh threat to break away. / AFP PHOTO / JUSTIN TALLIS

Prime Minister Theresa May has not ruled out walking away from the talks and some hardliners in her own party are urging her to do so to avoid paying a “divorce bill” and for a cleaner, simpler Brexit.

But many warn that leaving the EU with no agreement on future ties could damage the British economy.

So what could a worst case “no-deal” scenario look like?

– FOOD –

Britain and the EU would have to fall back to World Trade Organization rules to trade with each other, meaning a series of tariffs on imports and exports which are particularly high for farm products.

The British Retail Consortium has estimated that the price of cheese could rise by more than 30 percent.

A slice of Italian parmesan selling for £5 in a British supermarket would jump to £6.50.

The BRC estimated the average cost of food imported by retailers from the EU would increase by 22 percent.

Britain imports around 60 percent of its food from the EU, particularly fruit and vegetables.

– FLIGHTS –

With no deal in place, airlines based in Britain would no longer be allowed to fly to the European Union. Carriers such as British Airways would be required to obtain European authorisation individually to be able to fly, potentially affecting a flow of hundreds of thousands of passengers a day.

“It is theoretically conceivable in a no-deal scenario that there will be no air traffic moving between the UK and the EU on March 29, 2019,” Finance Minister Philip Hammond said earlier this month when asked about the prospect by a committee of MPs.

But he added: “I don’t think anybody seriously believes that is where we will get to.”

– CARS –

Imports and exports of cars would face 10 percent tariffs. That could hurt foreign carmakers with UK operations such as Nissan, whose plant in Brexit-voting Sunderland employs around 7,000 people and exports more than 80 percent of its vehicles.

Costs are likely to be passed on to consumers.

“Import tariffs alone could push up the list price of cars imported in the UK from the continent by an average of £1,500,” the Society for Motor Manufacturers and Traders said in a report.

– FINANCE –

Financial institutions would lose “passporting rights” that allow for cross-border services to clients across the bloc. Tens of thousands of jobs would be lost in the City finance hub as banks and insurers are forced to transfer EU-linked business to subsidiaries in the EU.

Many financial institutions have already started enacting contingency plans in case of a no-deal, with offices in Amsterdam, Dublin or Frankfurt opening up.

Oliver Wyman, a consultancy, estimates up to 75,000 jobs could be lost in Britain’s financial services industry.

– CUSTOM QUEUES –

Customs declarations required at British ports would rise from the current 55 million to 255 million a year if there is no separate deal.

The British Retail Consortium said this could mean delays at ports of “up to two or three days”.

In an interview with The Times last month, Hammond warned the port of Dover was “clearly not” equipped as “the volumes of trade at Dover could not be accommodated if goods had to be held for inspection”.

– IRISH BORDER –

Checkpoints would return to the 499 kilometre (310-mile) border between British-ruled Northern Ireland and the Republic of Ireland.

The checks would be hugely disruptive for the 30,000 people who cross it every day, often to work.

It could also revive smuggling, once a lucrative income for militia groups and revive sectarian tensions that have been largely dormant since a 1998 peace deal put an end to three decades of conflict.

Irish Prime Minister Leo Varadkar said earlier that customs posts would be “a brutal physical manifestation of historic divisions and political failure… a place of bloodshed and violence.”

– ELECTRICITY –

Once Britain leaves the Euratom treaty, other countries would no longer be able to send nuclear materials or components for its power plants unless a separate arrangement is agreed.

Britain’s Nuclear Industries Association has warned of the “risk of significant disruption” as nuclear power accounts for around 20 percent of the country’s electricity production.

Leaving Euratom without any other kind of deal in place would also stop the supply of radioactive isotopes used to diagnose and treat cancer patients, which are not produced in Britain.

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Time is running out: Germany urges UK to move in Brexit talks

It is up to Britain to move Brexit talks forward, Germany said on Friday, warning that “time is running out” for London to negotiate the deal it wants.

A day after the EU’s Chief Negotiator, Michel Barnier, said the talks were deadlocked over money and could not progress to discussions about future trade ties, German Government Spokesman, Steffen Seibert, urged Britain to act before an EU summit in December.

File: A demonstrator holds up a placard saying “Stand together Stop Brexit” at an anti-Brexit protest in Trafalgar Square in central London on June 28, 2016.
EU leaders attempted to rescue the European project and Prime Minister David Cameron sought to calm fears over Britain’s vote to leave the bloc as ratings agencies downgraded the country. Britain has been pitched into uncertainty by the June 23 referendum result, with Cameron announcing his resignation, the economy facing a string of shocks and Scotland making a fresh threat to break away. / AFP PHOTO / JUSTIN TALLIS

EU leaders will discuss Brexit at that meeting, Seibert said.

“This means Great Britain still has it in its own hands whether there will be enough progress so that the second phase of negotiations can start.”

British Prime Minister, Theresa May, told parliament on Monday it was up to the EU to move talks to the next phase, saying: “the ball is in their court”.

But her spokesman said on Friday that May would have “more to say” on the financial settlement at an EU summit next week.

Germany’s biggest industry group has advised companies active in Britain to make provisions for a “very hard Brexit” as London lacked a clear strategy.

German Chancellor, Angela Merkel, says London should not expect a special deal, and that it is more important to keep the remaining 27 member states together.

 

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UK top court seeks clarity on how to handle EU rulings after Brexit

Britain’s Supreme Court would like clearer guidance from parliament on how it should deal with European Union court judgments after Brexit, its new president said on Thursday.

The issue of what weight, if any, judgments of the European Court of Justice (ECJ) will have in British law after the UK leaves the EU is one of many thorny areas in the Brexit negotiations.

Brenda Hale, who was sworn in as President of the Supreme Court on Monday after serving as one of its justices for 13 years, said she and her colleagues were looking for guidance from parliament on the issue.

“We hope that the EU Act, when it’s eventually passed, will tell us what we should be doing – giving us the power to take into account, or saying we must take into account, or saying we must ignore.

“Whatever parliament decides we should do, we would like to be told because then we’ll get on and do it,” she said.

A government policy paper issued in August said Britain wished to leave the “direct jurisdiction” of the ECJ while also recognising that future civil judicial cooperation would need to take into account “regional legal arrangements” such as the ECJ.

The EU said that for certain issues such as the rights of EU citizens in Britain, the ECJ must continue to have its said – a stance strongly rejected by the most ardent advocates of Brexit.

Hale said that the government policy papers issued over the summer were “at quite a high level of generality” and described them as inspirational.

But she praised the formulation used by Prime Minister Theresa May in a major speech on Brexit in Florence on Sept. 22.

May said that where there was uncertainty around EU law, she wanted UK courts to be able to “take into account” ECJ judgments.
“‘Take account’ is quite useful because it does give one the power to take it into account, but also the power to say ‘for the following good reasons, we think something else,’” said Hale.

Her deputy, Jonathan Mance, said the form of words used in the EU Withdrawal Bill currently going through parliament was “a weaker formula”.

The bill says that British courts “need not have regarded to anything done on or after exit day by the European Court, but may do so if it considers it appropriate to do so.”

NAN

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UK negotiator dismisses reports of £40bn Brexit bill

Brexit negotiator David Davis on Sunday dismissed a report that Britain was prepared to pay a £40 billion ($54 billion, 45 billion euros) divorce bill on leaving the European Union.

A demonstrator holds up a placard saying “Stand together Stop Brexit” at an anti-Brexit protest in Trafalgar Square in central London on June 28, 2016.
EU leaders attempted to rescue the European project and Prime Minister David Cameron sought to calm fears over Britain’s vote to leave the bloc as ratings agencies downgraded the country. Britain has been pitched into uncertainty by the June 23 referendum result, with Cameron announcing his resignation, the economy facing a string of shocks and Scotland making a fresh threat to break away. / AFP PHOTO / JUSTIN TALLIS

The Times quoted a “Brussels source” in their story on Saturday, but Davis told BBC television that “they sort of made that up.”

“I’m not going to do an actual number on air, it would be ridiculous to do that, but we have a fairly clear idea where we’re going on this,” he said.

He called EU claims for Britain to contribute to the bloc’s future pension pot as “debatable to say the least.”

“The last time we went through line by line and challenged quite a lot of the legal basis of these things and we’ll continue to do that.”

British Prime Minister Theresa May on Friday revealed plans for a transition period of around two years after it officially leaves in 2019, during which time Britain would still largely be under current EU rules.

Davis stressed that Britain “would not under any circumstances” accept the supremacy of the European Court of Justice after the transition period, a key issue for Brexit hardliners.

He added that it was “quite likely” that a joint system of EU-UK courts will be agreed in order to resolve disputes.

May’s cabinet is divided over certain key issues of Brexit, particularly on what terms Britain wishes to access the EU’s single market after it has left.

The pro-EU faction of her government, led by finance minister Philip Hammond, want close ties with the bloc, while Brexit campaigner and foreign minister Boris Johnson is pushing for a cleaner break.

Johnson heightened tensions last week with a newspaper article spelling out his vision, and wrote again in the latest edition of the Sunday Telegraph to lay down his demands.

He said Britain should not adopt any new EU rules made during the transition period and wants London to be able to sign trade deals with countries outside the EU during the two-year period.

Davis denied Johnson’s article had changed the content of May’s speech, saying the “policy in the prime minister’s speech had been coming for a long time.

“I don’t think there’s been any change of policy in the last few weeks.”

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Don’t throw Brexit into chaos, UK minister warns before parliament vote

Britain faces a chaotic exit from the EU if lawmakers vote against legislation designed to sever political, financial and legal ties with the bloc, Britain’s Brexit Minister, David Davis, said before a key parliamentary vote.

Parliament is due to hold a late-night vote on whether to let the central plank of Britain’s Brexit plan – the EU withdrawal bill – move to the next stage of the lawmaking process.

The government is expected to win the vote, but it is the most serious test yet of Prime Minister, Theresa May’s leadership after she lost her parliamentary majority at a June 8 election and failed to win a clear mandate for her Brexit strategy.

The bill seeks largely to copy and paste EU law into British legislation to ensure the UK has functioning laws and the same regulatory framework as the bloc at the moment of Brexit, something the government says provides certainty for companies.

“A vote against this bill is a vote for a chaotic exit from the EU,” Davis said in a statement.

“Businesses and individuals need reassurance that there will be no unexpected changes to our laws after exit day and that is exactly what the repeal bill provides.

“Without it, we would be approaching a cliff edge of uncertainty which is not in the interest of anyone.”

Failure to clear the first of many hurdles in the lawmaking process would present a major problem for May, who now relies on the support of a small Northern Irish political party to govern and faces persistent questions about her future as leader.

“She needs to keep going, get this thing done … we need to get this great ship launched,” Foreign Secretary, Boris Johnson – a one-time rival for the leadership of the party and a prominent pro-Brexit campaigner said.

With the support of Northern Ireland’s Democratic Unionist Party, May has a working majority of 13 in the 650-seat parliament.

Most potential pro-EU rebels within May’s Conservative Party have signalled they are willing to back the plan at this stage, although they are expected to raise objections later in the legislative process when more detailed scrutiny takes place.

The opposition Labour Party has already said it plans to vote against the bill unless the government comes forward with concessions, and has said several clauses in the legislation amount to a “power grab” by government.

The government has promised concerned lawmakers that ministers would not use the wide-ranging powers to make “substantive changes” to law.

Some opposition lawmakers are also expected to defy party orders and support the government.

Pro-EU Conservative lawmaker Ken Clarke, said he expected the government to have to change the wording of the bill to win over parliament.

“We have been reassured they are not going to use these powers in any policy-making way.

“Parliament would be sensible to get them to write it so they are not giving themselves the possibility of using powers that no government has ever tried to take at the expense of parliament before,” he said.

The vote, which is expected late Monday or in the early hours of Tuesday, is the first of many stages the bill must pass before it becomes law.

Next, it will face line-by-line scrutiny and, if approved, then move to the unelected upper house of parliament – where May has no majority – for a similar process.

The process is expected to take months to complete and both houses should agree the final wording before it can be passed.

 

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UK-EU agreement on Brexit ‘divorce bill’ unlikely before November – Brexit Secretary

London – The amount of money that the UK will pay the EU in compensation for country’s withdrawal from the bloc is unlikely to be determined before November, Brexit Secretary David Davis said Tuesday.

“There won’t be a number by October or November,” Davis said on air of BBC Radio 4 broadcaster, answering a question about the timing for “divorce bill.”

Davis declined to say by when the exact payment would be set.

The UK held a referendum on June 23, 2016, deciding to leave the European Union.

Financial settlement became one of the main disputed issues at negotiations between the two parties.

According to various reports, the European Union may demand up to 109 billion dollars from the UK.

However, Brussels has not submitted its final demand yet.

Brexit negotiations officially started on June 19, when Davis arrived in Brussels to negotiate the terms with his EU counterpart Barnier.

The talks are expected to conclude by the end of March 2019.

NAN reports that the EU’s initial offer suggested that all UK nationals residing in the bloc would be able to benefit from all the rights they currently enjoy, including the freedom of movement.

In June, the UK government suggested that EU nationals residing in the United Kingdom would have to apply for “settled status.”

In July, media reported that UK nationals residing in the European Union might lose the right to move freely between EU member states or travel back and forth from the UK, unless London offers the same guarantees to the bloc’s residents residing in the country.

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