The United Kingdom (UK) has found itself in turmoil ever since the country voted to leave the European Union (EU) back in June 2016. The UK government has now released its assessment on the potential effects on the country if the lawmakers fail to agree on a deal with the EU. The country had two years to agree on a deal with the EU before its formal exit, but even though the deadline of 29th March is nearing, the UK has no deal in place. The possibility of a no deal Brexit is quite real, and if it comes to pass, then it could lead to complete chaos according to many experts.
Some of the findings in the report are quite alarming. The imposition of tariffs will raise food prices significantly. There was a move to ask leading UK supermarkets to stockpile food, but that is not really a possibility since the storage capability is simply not there. The report states, “In the absence of other action from government, some food prices are likely to increase, and there is a risk that consumer behaviour could exacerbate, or create, shortages in this scenario. As of February 2019, many businesses in the food supply industry are unprepared for a no-deal scenario.”
British Prime Minister Theresa May had agreed on a deal with the EU last year, but for it to be agreed, it needs to pass a vote in the Parliament. However, she has repeatedly failed to garner the necessary support needed to seal the deal and now the country is, unfortunately, staring at the possibility of a no deal Brexit. Earlier this week, news had in fact surfaced that if May is unable to reach a deal with the EU, then she might delay UK’s exit. That could give her the necessary time to push through the deal. However, it is also important to point out that most Members of Parliament are adamant that Brexit should go ahead as scheduled.
However, the biggest concern for most businesses was the start of tariff checks, and many had already stated that it could prove to be extremely damaging for British business. Finally, the authorities have come up with a figure, and in this report, it has been stated that businesses could expect a rise in costs to the tune of £13 billion a year. Needless to say, it is without a doubt a conservative estimate and the actual scenario could be far worse for businesses which depend on deliveries from Europe.
