What is ‘no deal Brexit’ and what does it mean for Scotland?

0
Have your say

The Scottish Government’s position on Brexit has been hardened this week by news from Westminster that Theresa May is increasingly considering the nuclear option of a ‘No Deal’ Brexit.

Since the surprise result of the referendum on leaving the European Union last June, both the UK and the EU have talked up the prospects of a smooth and orderly exit.

Britain will leave the EU in 2019.

Britain will leave the EU in 2019.

However, after a spate of negotiation meetings revealed how much talks have stalled, both sides are now primed to investigate the viability of a deal not being reached by the time the UK leaves the European Union, which is officially due to take place on March 31 2019.

However, many people (and arguably politicians) don’t know the detail of what a ‘no deal’ would entail, and what impact it would have on Scotland, the UK, and the rest of Europe.

What is a ‘No Deal’?

There remain several crucial sticking points in the negotiations that are discussed in bilateral talks with Michael Barnier and Brexit Secretary David Davis.

External factors still loom large over the talks, perhaps chief among them the right of the Conservative party, which, along with the party base, is far less amenable to terms that involve a payment from the UK to the EU.

In short, the No Deal means exactly what it says on the tin – the UK and the EU not reaching a deal before the clock runs out on the Article 50 process.

READ MORE: ‘Hard Brexit threatens research’

The UK would still have trade ties with the EU, as so much of the country’s trading takes place with the bloc.

Some proponents of a No Deal claim that it would free the UK from any financial obligation to the remaining EU states, a so-called ‘divorce bill’ which has been quoted as anywhere between £20bn and £100bn.

If an agreement hasn’t been reached, the basic rules of the World Trade Organisation would apply to trade between the two parties, meaning tariffs would be imposed on goods the UK sends to the remaining 27 EU states, and vice versa.

Opposition

Labour are opposed to leaving the EU without negotiating a deal, a position articulated by their shadow chancellor John McDonnell this weekend.

The stance came after it emerged that up to £250m will be spend by the Government preparing infrastructure and research into what a ‘No Deal’ outcome would mean.

READ MORE: Scotland involved in Brexit talks amid Brussels impasse

There is a sign that there is some emerging consensus on pressuring the Government on avoiding a no deal, with even some Remain-backing Conservatives getting on board with some of Labour’s proposals.

A cross-party amendment to the EU Withdrawal Bill which urges a longer transition period on the current trade terms was proposed by four MPs this week,two from Labour, Conservative grandee Ken Clarke, and Green Party leader Caroline Lucas.

The Scottish question

With banking giants JP Morgan now predicting a 25 per cent chance of a ‘no deal’ outcome, the Scottish Government is not shying away from an argument on the matter.

The SNP has said that a no deal Brexit would mean a disaster for Scotland, claiming that EU citizens would face an uncertain future.

Nicola Sturgeon’s party has also criticised the Brexit Secretary David Davis for not releasing ‘secret’ analysis could show the impact of a no deal scenario.

Scotland’s own Secretary of State for leaving the EU, Michael Russell, has compared what is perceived as a lack of clarity from the UK Government to the 600 page white paper that was produced in the lead up to the 2014 referendum on independence.

Scotland and Wales’ devolved Governments have effectively joined forces to try and maintain favourable terms from the Brexit settlement.

Even today, Mr Russell used a ‘Join Ministerial Council’ with Westminster politicians to send them a ‘strong message’ on a no deal Brexit.

The devolved governments are just two of any number of interested parties as the chances of a ‘no deal’ Brexit outcome seem to increase.

With fast-moving pieces and the interests of 27 other countries to consider, the deal or no deal question will only become more pressing as the weeks and months go on.