If a no-deal Brexit occurred, it would take one of two forms. The first outcome would be where the two sides failed to come to any agreements and the talks ended in acrimony. The UK would spill out of the EU on March 29 2019, guaranteeing chaos on all fronts. It would spell international isolation, as well as a shock to the economy and a political backlash. No competent government could contemplate such an option.
Dominic Raab, eager to make his mark as the new Brexit secretary, says the UK is ready to walk away from negotiations and take off the table its £39bn Brexit divorce payment. He is also ramping up preparations for a no-deal Brexit and will publish more details this week. All this ignores what we have learnt from the negotiations to date. The EU holds the highest cards. On every issue of substance, the UK has folded. Mr Raab might try to mitigate the worst effects of a no-deal exit, by throwing open ports and borders, for example. But Britain would be dependent on the EU’s goodwill to ensure trading continues. Goodwill that, like critical medicine, may be in short supply. Despite Brexiter claims, this is not a rerun of “Project Fear”. Leaving the EU without formal agreements would result in instant, harsh consequences. The UK is not a rogue nation; it respects its financial and legal obligations. This is why it is critical for the UK and EU to strike a sensible deal that serves both sides. A little give and take now is preferable to a calamitous breakdown later.