Exiting the European Union House of Commons Select Committee publishes report on the implications of a “no deal” Brexit on UK business

HomeInsightsExiting the European Union House of Commons Select Committee publishes report on the implications of a “no deal” Brexit on UK business

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In its latest report, the Committee warns that a “no deal” Brexit would “lead to severe disruption, pose a fundamental risk to the competitiveness of key sectors of the UK’s economy and put many jobs and livelihoods at risk”. In the Committee’s view, it would |represent a sudden rupture for the closely entwined economies of the UK and the EU 27”.

The Committee notes that the Government’s own economic assessment shows that a “no deal” exit from the EU would be “the most economically damaging outcome for the UK”. The effect would be most severe in the North East and the West Midlands, and the chemical, retail, food and drink and manufacturing sectors would be hardest hit.

The Committee finds that without a deal the UK could not rely on Article XXIV of the GATT to maintain current tariff-free trade arrangements with the EU. If the UK were to leave the EU without a deal, the European Commission has said the UK will become a third country without any transitional arrangements.

The Committee also concludes that a non-cooperative “no deal” “cannot be the desired end state for UK-EU economic relations”.

The Committee Chair, Hilary Benn MP, commented: “We heard from representatives of important sectors of the UK economy which are all great British success stories. Every single one warned us of the damaging consequences faced by their members in the event of a no-deal Brexit”. Amongst other things, Mr Benn said, “The UK’s position as the front-runner destination for venture capital investment in technology firms would be jeopardised”. Further, UK services businesses “would risk loss of market access and face uncertainty about how no deal would affect their staff working in the EU because they would be treated as third country providers by the EU”.

The Committee will report further on the implications of a no deal exit for citizens’ rights in the autumn. To read the Committee’s news release in full and for a link to the report, click here.