tuga
Legal Alien
No-deal Brexit benefits: What the positives could be and how likely they are to actually happen
We put the proposed benefits of leaving without a deal to an expert, Dr Simon Usherwood, Reader in Politics at the University of Surrey and an expert in Brexit and the EU, for his analysis.
The UK would have ‘complete sovereignty’
How much stronger would the UK be in a no deal?
Background: Sovereignty means the authority of a state to govern itself and determine its own laws and policies. The law-making powers of the MPs in the UK parliament are limited in places by membership of the EU, as it is constrained by laws made by MEPs in the European Parliament, as result of agreements the UK has entered into.
Claim: This is a particularly hot topic for supporters of Brexit who have demanded that the UK should have total power to make its own legislation.
No-deal supporters believe that a transitional period – that comes with a deal – will only delay this from being possible and threaten the UK’s power to break away.
Analysis: Dr Usherwood said that this idea of a totally independent state, free to act completely of its own will, is idealistic and does not exist in the modern age due to conventions and agreements the UK is part of all over the world.
On a simplistic level, he said, the UK would be able to make its own laws. But that does not mean it is not constrained by organisations and agreements on an international level.
“This doesn’t mean anything,” he said. “The UK would still be bound by all its other international obligations and commitments – the UN, the WTO, NATO, human rights treaties, etc – that impose limits on what can be done by this country.
“Yes, the UK could withdraw from those and do its own thing, but that was also always true of the EU. States always exist in relation to each other, so sovereignty is always relative: we let you do what you want, if you let us do what we want.
“By definition, that means limits, because you have to respect others’ sovereign rights. In addition, just because the UK decides to do something, it doesn’t mean others have to accept it, so it’s always limited by convention.”
Ending payments to the EU
The UK would be able to make its own laws
Background: As an EU member state the UK makes payments to the bloc’s budget and also receives funding, or receipts, from the EU – covering various agricultural, social, economic development and competitiveness programmes. The UK also receives a rebate from the EU which reduces its contribution.
According to publications from the House of Commons, in 2018 the UK made an estimated gross contribution of £13.2 billion and received £4.3 billion of public sector receipts from the EU, so the UK’s net public sector contribution to the EU was an estimated £8.9 billion.
Claim: Despite much heated debate around this subject, there are still some claiming that any financial disruption caused by a no-deal Brexit would be outweighed by the fact that the UK would no longer have to make these payments to the bloc.
A Brexit Central report on the benefits of Brexit stated: “Over the last three years net contributions to the EU have totalled £10 billion per year, or around 0.5 per cent of UK GDP. Ending these payments alone essentially cancels out the possible trade-related losses.”
Analysis: Dr Usherwood maintained that the “size of UK net contributions to the EU budget – while not insignificant – would be dwarfed by the wider economic impact of no deal”.
This is supported by reports from several economic bodies, including most recently the Bank of England and the Office for Budget Responsibility (OBR), which have warned that leaving without a deal would plunge the UK into a recession.
The UK’s fishing industry would grow
Fishers are only allowed to catch a certain number of fish, and set amounts of various species
Background: Post-Brexit the UK will not be part of the EU Common Fisheries Policy which manages fish stocks across Europe. It outlines quotas for which member states are allowed to catch each type of fish and encouraging the fishing industry by various market interventions.
Claim: The Government has said that after Brexit the UK will be an “independent coastal state and be fully responsible for managing fisheries in the UK’s Exclusive Economic Zone of 200 miles”.
Brexiteers have argued that an immediate exit – with no transitional period – could benefit this industry as it would take full control of fishing waters and therefore could double in size – without EU boats harvesting any areas.
Analysis: “Assuming the UK reasserted its rights to exclusive exploitation of territorial waters, then there would indeed be more capacity for UK-based boats to use,” Dr Usherwood said.
But he said that this would require more investment in new boats in order to maximise the potential.
“Plus there would be no guarantee about access to EU markets, where most UK-landed fish is sold at present,” he added, pointing out that there would be no trade deal in place with the EU which could make it harder to export any extra fish caught.
Dr Usherwood also said that there would be other factors at play. He said: “Fishing stocks will remain in an ecologically-precarious position and will need management with other countries, which might in turn require limits on fishing.”
Abolishing the Common Agricultural Policy (CAP) would lower food prices
Sheep farmers could be in trouble due to changes to tariffs in a no deal
Background: The CAP is an EU policy to provide financial support to farmers and help them compete on a level playing field, whilst still protecting against volatility in agricultural prices.
Claim: Some argue that British taxpayers pay twice – through subsidies paid to farmers and through policies to keep food prices artificially high. Dropping this entirely would reduce food prices for consumers.
Analysis: “CAP moved away from its old model of price-support to one of direct support for farmers some time ago, so this is more about the choices the UK makes on tariffs for agricultural products post-exit,” Dr Usherwood explained.
“UK farming is not that competitive in global terms in many products, so cutting tariffs to a very low level (or to zero) would make UK producers struggle to survive: thus lower food prices might come at a cost to rural communities,” he added.
“They could be supported by government, but that money would come from taxes, paid by everyone, so people would still be paying for this, albeit by other means.”
There are concerns that dropping tariffs could lead to farmers’ businesses being totally decimated due to an influx of cheap products. And it could be damaging, in particular, for beef and lamb farmers who export much of their produce across Europe which they would no longer be able to do with ease.
Cutting EU tariffs
Background: If the UK leaves the EU without a deal it would immediately be able to abolish all trading tariffs with the EU. This would automatically then apply to all other trading partners.
Claim: When tariffs are dropped it would make it easier to import cheaper products from other countries which could lower the prices for consumers – particularly for clothing and textile products.
Analysis: “As with the food product, cutting tariffs would indeed cut prices, assuming retailers passed on the saving.” But he said that it could be at a cost to domestic producers, who will be undercut by cheaper products.
A skills-based immigration system
Immigration and border control signs at Edinburgh Airport
Background: When the UK leaves the EU it will no longer be signed up to the freedom of movement principle which allows EU citizens to move freely around member states and live and work there as if they are a national of that country.
Claim: Immigration was a central issue in Brexit and supporters said that, in a no-deal, the UK would immediately be able to change its immigration system to enforce a skills-based system that only permits high-earning professionals to live in the country.
This, they argue, would retain fiscal benefits of migration without the financial burden of paying EU nationals’ benefits.
Analysis: Dr Usherwood said: “The UK already operates a skills-based system for non-EU migrants: we know that this currently struggles to match timely identification of supply and demand for particular skills, and also that there is a considerable need for low-skilled migration to do work that UK residents don’t want to do.
“It’s also worth noting that – overall – migration produces a net contribution to the UK economy, as migrants pay tax and consume goods and services in excess of their support from central government. However, extending this system to all migrants might further improve the balance on this front.”
Autonomy to make new trade deals
The UK could enter different trade deals with third parties
Background: The UK would have the freedom to sign up to new trade deals immediately in a no-deal Brexit, which would be hindered if it left with a deal and thus a transitional period.
Claim: Striking free trade deals with third countries – such as the US and Asian economies – could boost GDP and net productivity due to a more global market and reduced trade barriers.
Analysis: Dr Usherwood said that this is true but most countries “have indicated an unwillingness to sign such deals until the relationship with the EU is settled, given the UK’s exposure on this front”.
He also said that the UK could damage its reputation as a trade partner if it chooses to leave without any agreed deal.
“There might be some disquiet about the UK’s reputation as an honest partner if it were to walk away from a negotiated withdrawal from the EU,” he said.
Reducing regulatory burdens on businesses
Background: The EU has regulations that apply to businesses and cover aspects like health and safety and working hours. There are exemptions to some of these that the UK has pushed for, and therefore it does not have to adhere to all of these regulations. If we leave without a deal, the UK will not be obliged to maintain the remaining standards.
Claim: No-deal supporters said this could save businesses a considerable amount of money as there will be fewer administrative burdens and red tape. They argued this could be reformed to cater specifically to the UK economy and industries.
Analysis: Dr Usherwood said that this is all true – the UK would not be legally obliged to conform in this way if it does not sign up to a deal with the EU – but questioned the genuine benefit of it.
He pointed out that, due to said exemptions, the UK’s market is already very deregulated and rules that are in place are there for a reason – often to protect workers.
Businesses may benefit from having less “red tape” but, if they wanted to trade with the EU, they would have to show they matched EU regulations standards anyway.
“Also, transitioning from current arrangements will incur some temporary costs, especially as those businesses wishing to export the EU will need to continue to follow EU rules, so major divergence might impose additional costs,” he said.
“There is always talk about red tapes with the EU and, yeah, I am sure you can find some examples of some that may be overburdensome but they are always there for a purpose.”
We put the proposed benefits of leaving without a deal to an expert, Dr Simon Usherwood, Reader in Politics at the University of Surrey and an expert in Brexit and the EU, for his analysis.
The UK would have ‘complete sovereignty’
How much stronger would the UK be in a no deal?
Background: Sovereignty means the authority of a state to govern itself and determine its own laws and policies. The law-making powers of the MPs in the UK parliament are limited in places by membership of the EU, as it is constrained by laws made by MEPs in the European Parliament, as result of agreements the UK has entered into.
Claim: This is a particularly hot topic for supporters of Brexit who have demanded that the UK should have total power to make its own legislation.
No-deal supporters believe that a transitional period – that comes with a deal – will only delay this from being possible and threaten the UK’s power to break away.
Analysis: Dr Usherwood said that this idea of a totally independent state, free to act completely of its own will, is idealistic and does not exist in the modern age due to conventions and agreements the UK is part of all over the world.
On a simplistic level, he said, the UK would be able to make its own laws. But that does not mean it is not constrained by organisations and agreements on an international level.
“This doesn’t mean anything,” he said. “The UK would still be bound by all its other international obligations and commitments – the UN, the WTO, NATO, human rights treaties, etc – that impose limits on what can be done by this country.
“Yes, the UK could withdraw from those and do its own thing, but that was also always true of the EU. States always exist in relation to each other, so sovereignty is always relative: we let you do what you want, if you let us do what we want.
“By definition, that means limits, because you have to respect others’ sovereign rights. In addition, just because the UK decides to do something, it doesn’t mean others have to accept it, so it’s always limited by convention.”
Ending payments to the EU
The UK would be able to make its own laws
Background: As an EU member state the UK makes payments to the bloc’s budget and also receives funding, or receipts, from the EU – covering various agricultural, social, economic development and competitiveness programmes. The UK also receives a rebate from the EU which reduces its contribution.
According to publications from the House of Commons, in 2018 the UK made an estimated gross contribution of £13.2 billion and received £4.3 billion of public sector receipts from the EU, so the UK’s net public sector contribution to the EU was an estimated £8.9 billion.
Claim: Despite much heated debate around this subject, there are still some claiming that any financial disruption caused by a no-deal Brexit would be outweighed by the fact that the UK would no longer have to make these payments to the bloc.
A Brexit Central report on the benefits of Brexit stated: “Over the last three years net contributions to the EU have totalled £10 billion per year, or around 0.5 per cent of UK GDP. Ending these payments alone essentially cancels out the possible trade-related losses.”
Analysis: Dr Usherwood maintained that the “size of UK net contributions to the EU budget – while not insignificant – would be dwarfed by the wider economic impact of no deal”.
This is supported by reports from several economic bodies, including most recently the Bank of England and the Office for Budget Responsibility (OBR), which have warned that leaving without a deal would plunge the UK into a recession.
The UK’s fishing industry would grow
Fishers are only allowed to catch a certain number of fish, and set amounts of various species
Background: Post-Brexit the UK will not be part of the EU Common Fisheries Policy which manages fish stocks across Europe. It outlines quotas for which member states are allowed to catch each type of fish and encouraging the fishing industry by various market interventions.
Claim: The Government has said that after Brexit the UK will be an “independent coastal state and be fully responsible for managing fisheries in the UK’s Exclusive Economic Zone of 200 miles”.
Brexiteers have argued that an immediate exit – with no transitional period – could benefit this industry as it would take full control of fishing waters and therefore could double in size – without EU boats harvesting any areas.
Analysis: “Assuming the UK reasserted its rights to exclusive exploitation of territorial waters, then there would indeed be more capacity for UK-based boats to use,” Dr Usherwood said.
But he said that this would require more investment in new boats in order to maximise the potential.
“Plus there would be no guarantee about access to EU markets, where most UK-landed fish is sold at present,” he added, pointing out that there would be no trade deal in place with the EU which could make it harder to export any extra fish caught.
Dr Usherwood also said that there would be other factors at play. He said: “Fishing stocks will remain in an ecologically-precarious position and will need management with other countries, which might in turn require limits on fishing.”
Abolishing the Common Agricultural Policy (CAP) would lower food prices
Sheep farmers could be in trouble due to changes to tariffs in a no deal
Background: The CAP is an EU policy to provide financial support to farmers and help them compete on a level playing field, whilst still protecting against volatility in agricultural prices.
Claim: Some argue that British taxpayers pay twice – through subsidies paid to farmers and through policies to keep food prices artificially high. Dropping this entirely would reduce food prices for consumers.
Analysis: “CAP moved away from its old model of price-support to one of direct support for farmers some time ago, so this is more about the choices the UK makes on tariffs for agricultural products post-exit,” Dr Usherwood explained.
“UK farming is not that competitive in global terms in many products, so cutting tariffs to a very low level (or to zero) would make UK producers struggle to survive: thus lower food prices might come at a cost to rural communities,” he added.
“They could be supported by government, but that money would come from taxes, paid by everyone, so people would still be paying for this, albeit by other means.”
There are concerns that dropping tariffs could lead to farmers’ businesses being totally decimated due to an influx of cheap products. And it could be damaging, in particular, for beef and lamb farmers who export much of their produce across Europe which they would no longer be able to do with ease.
Cutting EU tariffs
Background: If the UK leaves the EU without a deal it would immediately be able to abolish all trading tariffs with the EU. This would automatically then apply to all other trading partners.
Claim: When tariffs are dropped it would make it easier to import cheaper products from other countries which could lower the prices for consumers – particularly for clothing and textile products.
Analysis: “As with the food product, cutting tariffs would indeed cut prices, assuming retailers passed on the saving.” But he said that it could be at a cost to domestic producers, who will be undercut by cheaper products.
A skills-based immigration system
Immigration and border control signs at Edinburgh Airport
Background: When the UK leaves the EU it will no longer be signed up to the freedom of movement principle which allows EU citizens to move freely around member states and live and work there as if they are a national of that country.
Claim: Immigration was a central issue in Brexit and supporters said that, in a no-deal, the UK would immediately be able to change its immigration system to enforce a skills-based system that only permits high-earning professionals to live in the country.
This, they argue, would retain fiscal benefits of migration without the financial burden of paying EU nationals’ benefits.
Analysis: Dr Usherwood said: “The UK already operates a skills-based system for non-EU migrants: we know that this currently struggles to match timely identification of supply and demand for particular skills, and also that there is a considerable need for low-skilled migration to do work that UK residents don’t want to do.
“It’s also worth noting that – overall – migration produces a net contribution to the UK economy, as migrants pay tax and consume goods and services in excess of their support from central government. However, extending this system to all migrants might further improve the balance on this front.”
Autonomy to make new trade deals
The UK could enter different trade deals with third parties
Background: The UK would have the freedom to sign up to new trade deals immediately in a no-deal Brexit, which would be hindered if it left with a deal and thus a transitional period.
Claim: Striking free trade deals with third countries – such as the US and Asian economies – could boost GDP and net productivity due to a more global market and reduced trade barriers.
Analysis: Dr Usherwood said that this is true but most countries “have indicated an unwillingness to sign such deals until the relationship with the EU is settled, given the UK’s exposure on this front”.
He also said that the UK could damage its reputation as a trade partner if it chooses to leave without any agreed deal.
“There might be some disquiet about the UK’s reputation as an honest partner if it were to walk away from a negotiated withdrawal from the EU,” he said.
Reducing regulatory burdens on businesses
Background: The EU has regulations that apply to businesses and cover aspects like health and safety and working hours. There are exemptions to some of these that the UK has pushed for, and therefore it does not have to adhere to all of these regulations. If we leave without a deal, the UK will not be obliged to maintain the remaining standards.
Claim: No-deal supporters said this could save businesses a considerable amount of money as there will be fewer administrative burdens and red tape. They argued this could be reformed to cater specifically to the UK economy and industries.
Analysis: Dr Usherwood said that this is all true – the UK would not be legally obliged to conform in this way if it does not sign up to a deal with the EU – but questioned the genuine benefit of it.
He pointed out that, due to said exemptions, the UK’s market is already very deregulated and rules that are in place are there for a reason – often to protect workers.
Businesses may benefit from having less “red tape” but, if they wanted to trade with the EU, they would have to show they matched EU regulations standards anyway.
“Also, transitioning from current arrangements will incur some temporary costs, especially as those businesses wishing to export the EU will need to continue to follow EU rules, so major divergence might impose additional costs,” he said.
“There is always talk about red tapes with the EU and, yeah, I am sure you can find some examples of some that may be overburdensome but they are always there for a purpose.”
