The UK has a hung parliament and Theresa May’s gamble on securing her power before Brexit negotiations looks to have backfired.
Her party’s majority has been wiped out and the Prime Minister looks set to begin talks with Brussels in a significantly less stable position.
The Tory leader’s refrain before the election was that Britain would walk away from an unsatisfactory deal with the EU.
Ferret Fact Service assessed this claim, and found it to be Mostly False.
Evidence
The talk of a Brexit ‘deal’ refers to Britain’s practical terms of exit from the EU. Much of this focuses on the UK extracting itself from various EU institutions as well as resolving liabilities and responsibilities incurred from years as an EU member.
However, the terms of a deal will also importantly deal with the UK’s future relationship with Brussels, particularly crucial in terms of trade and access to the customs union.
The UK has two years to negotiate Brexit, but Theresa May’s position since the EU referendum has been that if the deal presented to the UK was not satisfactory then the government would walk away without one.
She has made a number of red-line demands for any deal with Brussels including an end to freedom of movement, exit from the single market, and no compulsory UK contributions to the EU budget.
But what if the Prime Minister decides that Britain should come out of the EU with no deal secured (which has been labelled a ‘Hard Brexit)? Many constitutional experts think this is simply not a practical option.
Coming out of the EU will require the renegotiation of more than 100 trade deals, but if no agreement was secured, the government says trade would fall back on World Trade Organisation (WTO) rules which were negotiated to facilitate trade among nations.
WTO rules mean each nation must be treated equally in trading terms. But this would likely come with immediate practical difficulties.
Trade expert Michael Johnson argues that without the ‘frictionless’ trade agreement, increased tariffs on goods and custom checks could see significant difficulties in exporting to EU countries, as well as obstacles for Britain’s financial services industry, which may have to obtain individual national licenses in a pure ‘Hard Brexit’ scenario.
According to the House of Lords EU committee, without a deal UK emigrants’ entitlement to reside as EU nationals would disappear immediately, and Ireland could face a ‘hard border’ as Northern Ireland exits the EU.
Without a deal over the EU Open Skies policy, EU officials have told major UK-based airlines they would unable to fly on many routes, unless they opened up significant EU-based operations.
It should be noted that Theresa May’s claim that she would walk away with no deal instead of a bad deal does not make entirely clear what would be considered unsatisfactory.
A number of academics have argued that no deal on Brexit is not an option. The International Trade Committee concluded in its recent parliamentary inquiry: “It is quite clear that ‘no deal’ is in effect a deal to trade with the EU under WTO rules”. The latest OECD forecast predicted that a favourable deal for the UK is unlikely, and assume that WTO trading rules will apply after EU exit.
Ferret Fact Service verdict: Mostly False
While the full details of the Brexit negotiations are still to be revealed, it is widely thought that Theresa May’s assertion that leaving without a deal is preferable to a poor trade settlement is not workable. Given the complexity and sheer number of different trade deals and agreements in place, many experts believe the ‘no deal’ option is not plausibly possible.
