Experts warn of political mess, legal morass and economic disaster

By Andrew Woodcock PA

A "chaotic Brexit" without a trade deal or agreement on the terms of withdrawal would have "widespread, damaging and pervasive" consequences for the UK, according to a new report.

Prime Minister Theresa May has repeatedly said that "no deal is better than a bad deal" on the UK's departure from the EU.

But the report by academic think tank UK in a Changing Europe warned it could result in British airlines being unable to fly, nuclear power stations ceasing operation and "legal limbo" for millions of EU citizens in the UK and Britons living on the continent.

The think tank's director, Professor Anand Menon of King's College London, said a chaotic Brexit could happen in two circumstances:

:: If talks under Article 50 of the EU treaties break down prematurely and acrimoniously, with the UK ceasing to pay EU contributions and ending the supremacy of EU law in the UK with immediate effect; or

:: No agreement is reached within the two-year deadline set by Article 50, which runs out on March 29 2019, and the remaining 27 member states do not agree an extension.

The report found that a "no deal" withdrawal is likely to trigger a further "significant" fall in the value of the pound, leading to a rise in inflation, a fall in wages and consumer demand and a decline in business confidence and investment.

Legal "chaos" over the enforcement of contracts would add "costly and time-consuming" burdens on businesses exporting to the EU, while there would be "serious political and economic implications" for Northern Ireland, the report said.

The report, entitled The Cost of No Deal, predicted the Government would be likely to blame Brussels and supporters of Remain for the failure to reach an agreement, in a "mutual blame game" which would make future co-operation with the EU more difficult.

Prof Menon said: "Our findings show a chaotic Brexit would, at least in the short-term, spawn a political mess, a legal morass and an economic disaster.

"This report makes it clear 'no deal' is an outcome the British Government must strive to avoid.

"'No deal' doesn't mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive."

Labour MP Chuka Umunna, a leading supporter of the Open Britain campaign, said: "This eye-opening report should be required reading for the Brexit Secretary, the Prime Minister, and everyone who believes that a Brexit with no deal would be in any way acceptable.

"As these experts set out, it would in fact be nothing short of catastrophic."