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No Deal Brexit Is Back With A Vengeance

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09.06.2020

“Senior No 10 sources” have been at it again. This time, telling the Sunday Times that the UK is prepared to walk away from the Brexit negotiations should the EU fail to display greater flexibility. No deal, in other words, is back on the Brexit table. Indeed, as we explain in a recent report, a no trade deal outcome looks as likely as it ever has. But what difference would it make in the context of the disruption that Covid-19 will already be causing?

It’s worth starting by saying that no deal now is not the same as under Theresa May. For one thing, there is now a Withdrawal Agreement in place. This sorts out the money that the UK owes the EU, the issues of citizens’ rights and, to an extent, the fraught question of Northern Ireland (on which more in a minute). This was doubtless the point that Michael Gove was making in parliament when he declared: “We can’t have a no deal scenario because the withdrawal agreement is a deal.”

What we can have, however, is a no trade deal scenario. And here lies the other difference with the situation under May. The logic underlying government thinking, as spelled out recently by James Forsyth, seems to be that the “disruption caused by coronavirus means the costs of leaving without a trade deal are lower than they have ever been.”

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