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Deal or No Deal: where does Brexit leave us now?

Posted by. Dr Greg Barnes
Posted on 16 January 2019

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​​Following the rejection of Theresa May's Brexit deal (15 January 2019), Leeds Trinity University Lecturer in Business Dr Greg Barnes, discusses where it leaves us now.

The UK government has worked tirelessly since 2016 to achieve a negotiated exit from membership of the European Union. This has been to the detriment of many other political reforms, and it may have felt to observers that politicians are concerned solely with the issue of Europe to the exclusion of all else. The result of this effort has been a 585 page document that outlines the principles of how a negotiated deal between the UK and EU could work in the future.

The deal was thoroughly rejected by MPs this week dealing a fatal blow for the government's plans. Many people are therefore asking two questions, 'What next?' and, 'What does this mean for me?'

So, what happens next?

As it stands, without a negotiated deal, the UK leaves the European Union on the 30 March 2019 with no trading relationship in place with their closest trading partner.

There may be future opportunities for global trade on the horizon, but as it stands, over 40% of UK trade will revert to a different set of rules and laws governed by the 'World Trade Organisation' (WTO). 

The cost to businesses of buying many goods stands to increase under the WTO rules – for example Milk and Dairy products may have an additional cost of over 30% attached to them.

Most commentators and political insiders, however, believe that the EU will suggest an extension to the leave date of up to six months in order to give time for the UK to propose an alternative deal. The 'Grieve Amendment' was a small parliamentary instruction that was passed in early January. It requires the government to come up with this 'Plan-B' within three working days following the defeat last night.

This means that the Prime Minister must now go back to the drawing board and consider the alternative options available. There is a massive spectrum, but the major ones appear to revolve around existing relationships that the EU has with Norway and Canada.

Finally, the option for the UK to 'Remain' in the EU is still available. This would likely be following a second referendum, which the government has repeatedly said they do not wish to arrange.

What does this mean for me?

You may have seen newspaper headlines discussing traffic problems at the southern ports, shortages in food supplies and medicines. These issues are raised because unless there is an agreement on how trade works with the EU, then there will be delays in getting food and goods in and out of the country.

These delays though will be relatively short term, and while there may be disruption (under any scenario, even the 'Norway' option), the effects of Brexit are not likely to be cataclysmic. Instead, there is likely to be an adjustment period, and then processes will settle down in to a new rhythm, albeit with higher costs associated for many of our favourite foods and luxury items.

The biggest change for people living in the UK will be in the opportunities open to them. It will no longer be possible to take a summer job in Ibiza, or work as a ski resort rep in Chamonix. Buying clothes and goods online will be more expensive with less choice from European suppliers.

Setting up a small business in the UK at the moment allows for seamless sales to not only UK customers, but also hundreds of millions in Europe as well. 

These are the subtler changes that Brexit will bring, but ones that are likely to have a greater long-lasting effect. Our response has to be to embrace new avenues for international collaboration and become a more global society. As individuals, this has to involve looking for our own opportunities wherever they may be. Whatever the outcome of the Brexit negotiations over the next 12 weeks, use this as a lesson of how integrated all countries now are, and how you can make the most of that for yourself.

Dr Greg Barnes is a Political Economist lecturing in Business at Leeds Trinity University. He is the Programme Leader for Business and Management, and runs modules on International Business, Management and Project Management. Prior to moving to academia, his professional career included 15 years in public procurement and construction.