No Deal Brexit Impact on Three Quarters of a Million Jobs
A deal was struck between the UK and the EU in November last year, but British MPs voted it down in the House of Commons by a staggering margin – 432 against and 202 for. Prime Minister Theresa May’s plan was to establish the terms of departing from the EU, but the defeat marked how unpopular it was. The UK is still set to leave on 29 March, but the loss leaves the country’s future shrouded in uncertainty.
The UK is expected to withdraw from the European Union on 29 March 2019.
More than 200 MPs have signed a letter – organised by former Conservative minister Caroline Spelman and Labour MP Jack Bromey – urging May to rule out a no deal Brexit. But if a deal cannot be reached, then there is the very possibility of a withdrawal without a deal in place.
What Is a No Deal Brexit?
A no deal Brexit is just what it sounds like. It means the UK would immediately depart from the EU on the expected date, without a transition period and no guarantees on rights of residence.
The government anticipates significant short-term disruptions for consumers and businesses. Border checks could be re-introduced, which would result in major delays. Even a two-minute delay at the port in Calais would lead to 16-mile queues in both countries, according to French authorities.
Farmers and food producers are also especially vulnerable. A no deal scenario would mean that food producers would be subject to the same rigorous checks as suppliers from other countries. It’s estimated that as many as 6,000 meat processing plants that export to the EU would be required to undergo individual audits and put to a veterinary committee for approval, a process that could take as long as six months or more.
The everyday consumers would also be affected. As more than 70% of food imports come from the EU, a combination of higher tariffs and delays at ports could drive food price inflation.
What About Employment?
The big question on almost everyone’s mind is the impact a no deal Brexit would have on employment.
A new study published by the UK Trade Policy Observatory estimates that departing from the EU without a deal could cost three-quarters of a million workers their jobs – 148,000 in London alone, and over 80,000 in the North West. The analysis is based on estimates that a no deal scenario would have on different sectors of the economy.
Dr Serwicka, a Research Fellow in the Economics of Brexit at the UK Trade Policy Observatory, states that, ‘This research makes it very clear that both soft and hard forms of Brexit, and in particular, a “no deal” Brexit, will have a negative impact on the lives of residents the length and breadth of Britain.’
It’s impossible to determine the exact number of job losses that may occur as a result of a no deal Brexit. Rather than reduce their workforce, some employers may opt to shift work schedules or lower wages.