Is no Brexit deal with the EU better than a bad deal?

The UK has a hung parliament and ’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.

Ferret Fact Service | Scotlands impartial fact check project

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 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.

This claim is Mostly False

Ferret Fact Service (FFS) is a non-partisan fact checker, working to the International Fact-Checking Network fact-checkers’ code of principles. All the sources used in our checks are publicly available and the FFS fact-checking methodology can be viewed here. Any questions or want to get involved? Email us at factcheck@theferret.scot or join our community forum.

Good journalism changes things

The Ferret was established in 2015 with a mission to publish fearless, high quality journalism.

Since then thousands of people have joined us. We hope you will too.

We're a cooperative with places reserved for both our writers and subscribers on the board.

We're independently regulated, and work hard to keep our overheads down. This means that all the money we get from our subscribers is invested directly in original public interest news.

We're avowedly non-partisan so we can treat everyone fairly. We don't publish click bait and we don't do favours for political parties or powerful vested interests. We do help to change things.

Or see your other subscription options.

Got a story idea?

Tell us what you'd like us to write about next and vote up the best ideas.

Hi! To read more you need to login.
Not a member yet? Join our co-operative now to get unlimited access.
You can join using Direct Debit, payment card or Paypal. Cancel at any time. If you are on a low-income you may be eligible for a free sponsored membership. Having trouble logging in? Try here.
Hi! To read more you need to login.
Not a member yet?
Hi! You can login using the form below.
Not registered yet?
Having trouble logging in? Try here.