A no-deal Brexit would be 'overwhelmingly negative', warns think tank

The UK government says it is ready to leave the EU without a deal if necessary (Picture: PA)

The impact of a chaotic Brexit “will be severe and overwhelmingly negative”, an academic think tank has warned.

A no deal scenario between the UK and EU “remains a possible, albeit not likely”, outcome of the Brexit process, which “would have a huge impact across a whole range of both regions and sectors”, The UK In A Changing Europe argued.

Its report entitled Cost Of No Deal Revisited said that an outcome where the UK failed to sign a withdrawal agreement would result in economic and social “short-term disruption”.

It said: “The real impact of a chaotic Brexit relates not to the longer-term trading arrangements developed for the UK but, rather, to the short-term uncertainties associated with the disappearance without replacement of many of the rules underpinning the UK’s economic and regulatory structure.”

Effects would be felt, it added, in industry sectors from “agriculture to financial services; to areas which we take for granted as essential to the UK’s economy and society, such as air transport and drugs; and to our EU national colleagues, friends and family, and to our fellow citizens living elsewhere in Europe”.

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The report warned the European Union was “highly unlikely to be willing to negotiate mitigating actions that are far more important for the UK than for the 27 unless and until they receive, at a minimum, credible assurances that the withdrawal issues can be resolved”.

The report said: “So while a chaotic Brexit remains a possibility, either via a breakdown in the negotiations or the inability of British politicians to provide a majority for any conceivable negotiated outcome, its impacts will be severe and overwhelmingly negative.

“In the short term at least, considerable uncertainty and disruption will result.

“In all likelihood, the chances of negotiating the kinds of mitigating deals that the Government seems to assume will be possible in its technical notices on the pact of no deal seem slim.”

It added: “What the preceding analysis has illustrated is not only that no deal remains a possible – albeit not likely – outcome of the Brexit process, but that it would have a huge impact across a whole range of both regions and sectors…

“The impact of a chaotic Brexit would not be uniform… It might be that attempts at mitigation could, in the short term, actually boost GDP.

“That being said, what is all too clear is that it would also generate genuinely catastrophic outcomes in some respects.”

A think tank has warned a no-deal Brexit will have an adverse effect on the UK (Picture: PA)

Professor Anand Menon, director of The UK In A Changing Europe, said: “Make no mistake, the impact of a no deal Brexit will be severe.”

He added: “While it is wise to plan for no deal, and indeed attempt to mitigate against the worst aspects of a chaotic Brexit, it makes far more sense to avoid such an outcome altogether.”

Labour MP Stephen Doughty, supporter of the People’s Vote campaign, said the report underlined “how a chaotic no deal Brexit would be disastrous for our country in almost every way imaginable”.

He said: “No-one voted for a bad Brexit deal or for no deal, but that’s currently where we’re heading.

“That’s why it’s imperative that people take back control of this process with a People’s Vote on any Brexit deal.”

Lib Dem MP and Best for Britain champion Layla Moran added: “No deal Brexit will rip apart our everyday lives and threaten our economy.

“This now is not Project Fear – it’s near and we are hanging over the precipice.”