A 'No-Deal' Brexit, Put Simply

By Blog Writer Lyell Tweed

The UK’s new Foreign Secretary, Jeremy Hunt, has joined Britain’s International Trade Minister, Liam Fox, in stating that the chances of a ‘No-Deal’ Brexit are ‘increasing by the day’. The governor of the Bank of England, Mark Carney, also thinks its chances are ‘uncomfortably high’. Since the triggering of Article 50 in March 2017 there has been much confusion surrounding the negotiations between the Government and Brussels, with little progress seeming to be made. A so called ‘No-Deal’ Brexit has emerged as an option in recent months as negotiations continually stall between the UK and EU, and Eurosceptic Conservative MPs give Theresa May little room for manoeuvre at the negotiating table. The government is set to publish a series of technical notices to prepare for the possibility of a ‘No-Deal’. But what does a ‘No-Deal’ Brexit mean, and what has led Britain to be in this situation?

A ‘No-Deal’ Brexit simply means the UK and EU failing to reach an agreement on the terms of the UK’s departure; this outcome is currently being discussed by Brexit Secretary, Dominic Raab, and EU Chief Negotiator, Michael Barnier. This would be despite the two year negotiation period allowed under Article 50 of the Lisbon Treaty, the formal process a country must go through if it wishes to leave the EU, which was triggered in March 2017. A consequence is that there would be no transition period, and the the negotiations could only be extended past 29th March 2019 if all 28 EU member states agree to it.  The prospect of a ‘No-Deal’ Brexit has become highly divisive; some see it as crashing out of the EU, leading to disastrous consequences, with others seeing it as the best option.

A ‘No-Deal’ Brexit has become more likely after the government’s long awaited white paper on the issue, the Chequers plan, was met with scepticism from both pro-EU and Eurosceptic MPs. The main aims of this plan were: to ‘Maintain a common rulebook for all goods’, create a ‘Joint institutional framework’ for interpreting UK and EU law, and to create a new customs deal. This would hopefully create a ‘precise and responsible approach to the final stages of negotiations’. The issue of the Irish border, UK tariff setting, and Parliamentary oversight can be seen throughout much of this white paper.

The opposition from Parliament to this plan came from the ERG (European Research Group) headed by Jacob Rees-Mogg. The group have been described by Nicky Morgan as ‘our (Conservative’s) version of Momentum’ and has become a significant force in parliament. Mogg has continuously insisted that the government pursues a ‘Hard’ Brexit, and took a particularly tough position on the Prime Minister’s Chequers plan. The ERG has instead been drawing up a ‘positive Brexit plan’ with ‘No-Deal’ an option on WTO (World Trade Organisation) terms .

They forced May to accept four of their amendments to the Chequers plan, including prohibiting the UK from collecting tax on behalf of the EU without reciprocity, effectively blocking the ‘facilitated customs arrangement’ from the Chequers plan. These amendments were put forward as they believed May’s ‘facilitated customs agreement’ and plans for a ‘common rulebook’ would allow for an overly close relationship between the UK and the EU in the future. Conor Burns, MP for Bournemouth West, articulated this view- stating that he doesn’t want the UK to be in a position of ‘permanent orbit around the EU where we end up with a deal but don’t have a seat around the table’. The ERG are firm believers that ‘No-Deal’ is better than a ‘Soft’ Brexit scenario, highlighting the strong fractions within the Conservative Party, and showing how the government has moved towards this outcome from the negotiations. 

However, the EU’s response to May’s Chequers plan may have also increased the likelihood of a ‘No-Deal’. Following talks with EU leaders, Jeremy Hunt has called on the EU to change its approach to Brexit to stop a ‘No-Deal’, while labelling the Chequers plan as merely a starting point for further negotiations. The Danish finance minister, Kristian Jensen, and the Latvian foreign minister, Edgars Rinkevics, have both stated that a ‘No-Deal’ Brexit is becoming increasingly likely; although Jensen also described the Chequers plan as a ‘realistic proposal for good negotiations’.

Evidently, the notion of a ‘No-Deal’ Brexit is a source of vitriolic debate within the UK; it is alarming to some, but supported by others. No one can possibly predict what is going to happen between now and 29th March 2019 and beyond. The vague rhetoric surrounding phrases such as ‘Brexit means Brexit’ and ‘Soft/Hard Brexit’ does not help matters, with the political infighting likely to last for a while longer. Time alone will tell whether the policy and discussion around Brexit will become clear to the public when parliament resumes in the coming weeks, and whether the government can survive these turbulent times. 

Sources and Further Reading

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