British Prime Minister Theresa May is currently rallying hard to strike up a Brexit deal with the European Union before the 29th March deadline. This deal would determine Britain’s terms of the exit pertaining to trade, immigration, border issues, and debts. After several months of negotiations, on 15th January 2019, Theresa May presented a bill/motion to the lower house of parliament. This bill, which encapsulated the withdrawal agreement she had negotiated with the European Union, was rejected by an astonishing 230 votes.
With deadline inching closer every day, May and her parliament need to settle on a bill unless they want Brexit to completely destroy UK. On 29th March, we will receive one of the 4 possible outcomes of Brexit.
Draft a new Brexit deal
Theresa May can return with an amended deal and call for a second vote. It would be difficult to predict the exact changes she would need to make to tip the vote in favour of the new deal. Nonetheless, a major hurdle she would have to overcome is the issue surrounding the UK’s 310-mile land border with the EU – between Northern Ireland and EU member the Republic of Ireland. Neither side wants to see a return to checkpoints, towers, customs posts or surveillance cameras at the border. The UK and EU agreed to put in place a “backstop” – a kind of safety net to ensure there is no hard border whatever the outcome of future trade talks between the UK and the EU. The backstop agreed between the two parties would keep Northern Ireland aligned to some EU rules on things like food products and goods standards. The backstop would also involve a temporary single customs territory, effectively keeping the whole of the UK in the EU customs union. If future trade talks broke down without a deal, the backstop would apply indefinitely. Northern Ireland’s Democratic Unionist Party, which keeps Theresa May in power, is also against it and it withdrew support for the government when voting on her Brexit deal.
Want a detailed understanding of Britains border issues with Ireland? Read our article for an easy rundown.
Extend the deadline
For the UK to leave the EU it has to invoke Article 50 of the Lisbon Treaty which gives the two sides two years to agree on the terms of the split. Theresa May triggered this process on 29th March 2017, meaning the UK is scheduled to leave at 11 pm UK time on Friday, 29 March 2019. A European court has ruled that the UK can decide to stop the process. Alternatively, it can be extended if all 28 EU members agree, but at the moment all sides are focusing on that date as being the key one, and Theresa May has put it into British law.
Not to mention, most EU countries are quite disgruntled with Brexit and are in no mood to help UK with a deadline extension.
Similar to the first referendum that triggered Brexit, the Parliament could decide to hold a second referendum. This would require an extension of the deadline first to ensure sufficient time to carry out the vote. Additionally, it would require determining the exact question to be asked in the referendum.
The thing is that most Britons who voted a Yes in the previous referendum are now regretting their decision.
Brexit has pushed Britain’s economy into an abyss and people have little hope of May striking a deal in the next two months. Which is why, a lot of Brits are now demanding a second referendum, much to the agitation of May.
In the past two years, May went from being a loved and competent Prime Minister to one of the most hated ones in UK’s history. But she has already vowed to “resolve” the Brexit matter before the deadline and isn’t willing to give in to demands for a second vote just yet.
The aim of the motion was to allow a transition period from March 29, 2019, to Dec. 31, 2020. This transition period would have given businesses, government agencies, and UK citizens time to customize themselves to the new arrangements. However, if none of the above options are invoked, the UK will leave the EU with no deal. A “no deal” Brexit does what it says on the tin. It means the UK and the EU would be unable to reach a withdrawal agreement.
If no agreement can be made, it means there would be no 21-month transition period. If that was the case, consumers, businesses and public bodies would have to respond immediately to changes as result of leaving the EU. A no deal doesn’t stop the UK leaving but it means there is absolutely no clarity about what happens.
Here are some of the consequences if there was no Brexit deal.
The EU said Britain will have a ‘third country’ status when there is a ‘no deal’. Britain would have the same status as countries like China, Pakistan or Russia. The UK would revert to World Trade Organisation rules on trade. While Britain would no longer be bound by EU rules, it would have to face the EU’s external tariffs. The goods and services crossing the EU borders will become more expensive and have tariffs upto 38%. The UK food and drink industry may lose access to 70 plus markets in the world. Under the rules of WTO, car and car parts would be taxed at 10% every time they cross the UK-EU border. Even though the tariff is paid by the importers, the actual price would have to be paid by the consumers, so the cars would be more expensive for the EU consumers.
Brexit completely changes UK’s trade agreements with the EU. Read our article to know more.
The withdrawal deal gave a temporary guarantee for the British people to live elsewhere and vice-versa. It allowed the people to move freely till 2020 when the Brexit period ends. But, if there is a no deal, this agreement will go. The people will have no option but to register as the residents of the country where they live. The UK has already said it does not intend to impose the requirement of a visa from EU citizens for short stays, even in the event of “no-deal”. There was an agreement between the 2 countries for ‘visa-free’ travel for short term visits, which may go. The UK becomes the third country, due to which passports also will have issues. There could be long delays at borders if passport and customs checks are heightened. There would also be major disruptions in airports and can lead to safety issues.
The UK Government has insisted that preparations for no deal are part of its overall Brexit preparation strategy. ‘No deal’ would mean that there would be no framework and nothing in practice for future relationships. There would be EU laws transferred over to UK so there would be no missing outs on the law book.
The ‘No deal’ would wipe off 4.45% to 7.75% of the goods and services produced by the UK by 2024. Most of the fall will happen in the few months of Brexit. There is also going to be a 2% to 7% loss in GDP. The pound will fall by 25%. The Government will not have to pay the £13 billion in contribution. The UK estimates that the total Brexit bill it will pay over a period of years is €40 billion to €45 billion, according to the UK’s Brexit Secretary, David Davis.