No-deal Brexit could cost UK hundreds of thousands of jobs

12 Dec 2018301 Views

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As Brexit proceedings continue to unfold, a new report examines what could be at stake if a no-deal agreement is reached.

This evening (12 December), a confidence vote in the leadership of UK prime minister Theresa May is set to take place between 6pm and 8pm UTC. The secret-ballot announcement comes as May has been liaising with European leaders in the hope of securing compromises when it comes to her Brexit deal, which has not proved popular.

If May wins the ballot tonight, it would prevent any challenges to her leadership for another year, according to Conservative party regulations. If defeated, Brexit discussions are likely to screech to a halt until a new leader is in place.

What would a no-deal Brexit look like?

A report from the UK Trade Policy Observatory and the University of Sussex has gathered data on what a no-deal or ‘hard Brexit’ would look like in the UK jobs market.

In the entirety of the UK, close to 750,000 jobs could be lost as a result of a no-deal outcome. London is expected to be hit the worst, with close to 150,000 positions pegged to go if this arises.

A chart from Statista demonstrating the jobs that could be lost in a no-deal Brexit.

Data visualisation from Statista demonstrating the job losses a no-deal Brexit would bring. Infographic: Statista

In the hypothetical event that May is ousted, the new leader could follow her path when it comes to negotiating with the powers that be or the EU around issues such as the backstop. At present, there is no parliamentary majority for the deal currently on the table.

If a ‘hard Brexit’ candidate became leader, there is the likelihood that the Northern Ireland backstop could be completely scrapped. Given that the EU has been staunch in its requirement for the backstop to remain, a no-deal Brexit would likely on the cards in this case.

There have also been suggestions made that the UK could ask for an extension to Article 50, allowing it more time to negotiate. This is likely only to occur if a majority of EU member states agree, and they will likely only do so if a clear outcome is in view. 

Others say that Article 50 can be completely revoked, the idea being that a new prime minister could trigger it for a second time, beginning the negotiation process again.

A second referendum or a new mandate for Brexit in a general election could also be an option. As it stands, the next UK general election is due to take place no later than May 2022.

May remains defensive

Speaking outside Downing Street today, May said: “We must and we shall deliver on the referendum vote, and seize the opportunities that lie ahead.” She added that a leadership election means the Conservatives risk handing control of negotiations to opposition MPs.

“A new leader wouldn’t have time to renegotiate a withdrawal agreement and get the legislation through parliament by March 29, so one of their first acts would have to be extending or rescinding Article 50, delaying or even stopping Brexit when people want us to get on with it,” she said.

At the time of writing, May has secured indication of support from at least 158 of her party MPs, but it remains to be seen how it will all turn out.

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com