Every Brexit scenario is damaging for the British economy but the worst one of all is a Brexit based on WTO terms.
This involves inflicting a triple-whammy of harm on the country by (i) reducing our relationship with the EU to third country status; (ii) taking us out of the Customs Union and (iii) removing the benefits of the Single Market.
Third country status means under WTO rules the EU must apply the same tariffs on the UK that it does with all other countries with which it has no free trade agreement. So almost overnight the UK will lose tariff free access, making all goods on which tariffs are charged uncompetitive with our largest trading partner.
Leaving the customs union means subjecting UK businesses to additional red tape and the costs vary from £4bn per annum to £25bn per annum. It isn’t just the additional cost and burden of form filling but also the need, at the border, to satisfy ‘rules of origin’ and ‘product standard tests’ that will slow trade and create delays. Any delay is a cost to business.
Over the past 25 years, the UK has significantly integrated its supply chains with many businesses located in the EU. The automotive industry is just one example (although a massively important one as it represents 12.5% of our export of goods) of an EU wide supply chain dependency. Standardisation of rules and the ability to move components across borders is a fundamental part of UK manufacturing and is achieved by being part of the single market in goods. If that integration breaks down, and it does under just about any Brexit scenario, then it has a disruptive effect on manufacturing and supply chain management.
This disruption doesn’t just apply to goods as, without international permits, our HGV drivers will not be able to operate in the EU. We have already seen insurers and banks shift some of their staff to other EU countries and so far they have moved £800bn in assets out of the UK. A WTO Brexit will only accelerate this trend.
So Halloween approaches. What a fitting date for a potential no deal, cliff edge Brexit. A date that is a celebration of the dead. Well I for one shall not be celebrating if that happens. Until that day comes I shall continue to campaign for a People’s Vote, giving people the chance to reconsider their June 2016 decision in the light of the facts, giving the people the option to vote to remain in the EU because, without question - “No Brexit” is better than any Brexit on offer.
Prospective Parliamentary Candidate