How Will a No Deal Brexit Impact Your UK Business?

Britain has been granted a Brexit delay until 31 October. Prime Minister May had originally hoped for a much shorter delay until 30th of June. Her hopes were dashed when EU leaders rejected her proposal.


Theresa May now has six months to persuade Parliament to agree to her deal. But so far, the Brexit standoff has proven to be unbreakable, with MPs thrice refusing to agree to her deal.

To Deal or Not to Deal?


Most MPs in the House of Commons, including Theresa May, would rather avoid Britain leaving the EU without a deal. Yet her draft deal has proven to be so divisive, it has caused MPs across the house to resign. Political arguments with regards to leaving have been prevalent for months. The Conservative Party's own hardline  Brexiteers in particular, have come out strongly in favour of a no deal, rather than a soft Brexit.


What is a No Deal Brexit?


Leaving Europe without a deal would mean that the UK and the EU have failed to unite behind a mutually acceptable withdrawal agreement. In this case, the planned 21-month transition period would become null and void.


This situation could force British businesses, consumers, and public entities to immediately respond to the changes brought about by us leaving the EU.


No Deal Means No Clarity


According to the political reader, Dr Simon Usherwood from Surrey University, a no deal scenario would not stop Britain from leaving the EU, "... it just means that there will be no clarity about what could happen next."


It's highly likely that both the EU and the UK would face some kind of fallout from a no deal, least of all the negative image it would present to the rest of the world. But it could also lead to even more uncertainty for people who live and work in the UK. Here are just a few of the potential consequences of a no deal:




Britain would revert to WTO (World Trade Organisation) rules. This means that the UK would no longer be bound by European trade regulation, but it would have to face external EU tariffs. A rise in the price of imported goods would be the result.


British-made products would require new certification and authorisation by the EU, or face rejection. To avoid delays in their supply chains, some manufacturers could leave Britain and move their operations across the Channel.




The United Kingdom would be free to control the immigration levels of EU nationals. The EU could do the same for the UK. This would lead to heightened passport and customs checks on Britain's borders, causing long delays as a result.


1.3 million Britons live in the EU and 3.7 million Europeans live in the UK. In terms of the right to live and work, their fate would be unclear. The likely outcome is that expats will seek to register as residents in their country of residence.




Some EU laws would be transferred to the UK to prevent holes appearing in the British legal system. The UK would no longer adhere to European Court of Justice rulings,  but would still be bound to the European Court of Human Rights.




The UK Government would not have to contribute the annual £13 billion to the European budget. But it would lose out on some EU subsidies. The Common Agricultural Policy, for example, pays out £3 billion to British farmers every year. Both Britain and the EU would honour financial commitments agreed at the 2019 budget.


Irish Border


This issue would remain unresolved. No deal would mean that the border would become an external frontier for the EU. Pressure would be brought by the EU to enforce immigration and customs controls.


The British Government would aim to avoid a hard border and, for the time being at least, no new tariffs on goods passing from Ireland into Northern Ireland would be introduced.


No Deal. Who is For? Who is Against?


The majority of British MPs would prefer to leave Europe with a deal. But conflicting messages regarding the pros and cons of so-called 'crashing out' are loud in Westminster.


For No Deal


Not having to pay the EU would give Britain an economic boost, claims the Tory Brexiteer Sir John Redwood. Pro-Brexit economist, Professor Patrick Minford, thinks operating under WTO regulations would bring the benefits of Brexit without having to wait for the transition period to run its course.


Against No Deal


Our reliance on EU imports could leave shop and supermarket shelves empty, warn UK retailers. EU tariffs could also drive the price of products up.


Chief of Airbus, Paul Kahn, who employs upwards of 14,000 people with more than 110,000 jobs in the supply chain, has said that a no deal could force him to make some harmful decisions regarding Airbus' operations in the UK.


How Likely is a No Deal?


The long-standing impasse concerning key issues between the EU and the UK have resulted in a no deal becoming a likely outcome. May's original Chequers plan not only split her Party, it was also dismissed by EU leaders. The Prime Minister's response was to insist the EU tabled fresh proposals for trade and the Irish border.


Then, after negotiating for months, Mrs May announced she had brokered a withdrawal agreement that offered a fruitful future relationship with the EU, and promised a level of co-operation unrivalled by any other country in the world. This deal, however, was widely criticised from all sides of the House, and since then, Government has stepped up preparations for a no deal.


Both the Withdrawal Agreement and the Prime Minister's deal have been flatly rejected. May's most recent appeal to EU leaders for a short extension also fell on deaf ears. This leaves the UK until the end of October 2019 to find the best possible solution to the Brexit conundrum. And judging by the state of things so far, the outcome remains still largely unclear.

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