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What would a no-deal Brexit cost the UK?

 

When the debate on whether the United Kingdom would leave the EU started in 2016, one of the biggest talking points, and a big argument for team ‘remain’ was that in their efforts to leave the EU, the UK would probably end up spending more than we had actually paid the EU in our 47 years of being members. This argument developed a lot of speed, especially with one of the ‘vote leave’ campaign points being the need for the UK to leave the EU in order to save money.

Four years down the road in 2020, Brexit is still casting its shadow over us, and many are questioning when we’ll finally be able to put it behind us. As estimated, the  economic cost of Brexit so far has been put at £130 billion, which now exceeds what the UK have paid the EU in the last 47 years of membership. Some argue that these figures are incorrect and that we have in fact paid more to the EU than this 130 billion amount comes close to, but most agree that if our expenditures haven’t yet exceeded what we were paying to the EU, they will soon.

In fact, many are predicting that the UK’s no-deal Brexit, which is an option that still lies in the air for the country if the Prime Minister, Boris Johnson, is unable to secure an approved deal, could end up costing more than the UK has paid out to combat the COVID-19 outbreak of 2020. If the UK are unable to agree on a deal by the end of December 2020, the current final date that the Brexit transition period ends, the country risks leaving without a deal, which will cause substantial issues to cross-border trade.

Chancellor Rishi Sunak spoke out this week in an attempt to restore some calm, assuring Brits that it was important that the UK government spent the necessary time securing a good deal, rather than accepting any terms the EU offered. He suggested that COVID-19 poses a much greater threat to the UK economy than a no-deal Brexit would. However, the question does remain: could the UK cope with both at the same time? The effects look very likely to bring further economic shocks to the country, with economists suggesting that a no-deal Brexit could cause economic shocks two or three times worse than the current pandemic has.

The predictions from economists are that we’re yet to even see the economic shocks that a no-deal Brexit could bring to the UK, with expected consequences of the scenario rolling out over a long-term period. A researcher from the London School of Economics suggests “It takes a much longer period of time for the real side of the economy to adjust to the change in openness and change in the profile of trade.” These shocks would appear on top of what is already one of the deepest recession’s Britain’s economy has seen due to the COVID-19 outbreak. 

It is our opinion that a deal should be made, and that a no deal Brexit would cause a wealth of damage to the country. 

The current immigration rules for entering the UK are set to change when the Brexit transition period ends on 1st January 2021. If you are worried about your visa or want to discuss how to get a visa under the new immigration system, please do get in touch and a member of our team of immigration lawyers will be able to assist you.

Westkin Associates

info@westkin.com

5th Floor, Maddox House,
1 Maddox Street
Mayfair
London
W1S 2PZ
United Kingdom
0207 118 4546

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