The official rhetoric that a “no deal” Brexit is better than a bad deal, has been much less in evidence of late. The official government yardstick that the UK and EU are 95% of the way through agreeing an unspecified deal of unstated complexity tells us nothing about if a deal will be agreed or not since there is no official movement from either side which will solve the Gordian knot of the Irish border issue – the government never said that progress was linear.
The latest body to sound a warning about the dangers of a “no deal” scenario is the National Audit Office (NAO). It is the job of NAO to scrutinise how the government is operating and report back to MPs such that they can hold government to account from an informed position.
The government is hoping for trade to be “as frictionless” as possible after Brexit, but as it is currently actually “frictionless” (as an EU state and member of both the single market and customs union) the future situation will be worse than that enjoyed today. NAO estimates put cross border trade at £423 billion per year.
The NAO warns that the UK will “pay the price” of a no deal Brexit since border controls will not be available for 30/3/19 when the UK would crash out of the EU with do deal (or transition period). It points out that thousands of exporters haven’t been given enough time to prepare for the new border rules – if for no other reason than nobody knows what they will be until a deal/no deal is struck. In fairness, NAO said that the government had made some progress on preparing for a “hard” Brexit.
The head of NAO, Sir Amyas Morse said: "The government has openly accepted the border will be sub-optimal if there is no deal with the EU on 29 March 2019. It is not clear what sub-optimal means in practice, or how long this will last. But what is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price."
NAO estimates suggest that a quarter of a million firms would need to file customs declarations for the first time if the UK were to fall back on WTO rules. HMRC could see an increase from 55 million customs declarations to more than 250 million. NAO points out that increased customs checks and declarations could lead to long delays at ports.
The NAO also pointed to the risk of increased criminality: "Organised criminals and others are likely to be quick to exploit any perceived weaknesses or gaps in the enforcement regime. This, combined with the UK's potential loss of access to EU security, law enforcement and criminal justice tools, could create security weaknesses which the government would need to address urgently."