Over the last few weeks, a once-unimaginable scenario has been gathering momentum towards acceptability and even expectation. This scenario is that, far from leaving the European Union with a brand-new trade deal to replace the single market, a deal on customs to enable the free flow of goods, and a framework agreement to cover the vast range of our non-commercial integration, the two-year hourglass of Article 50 will simply run out against a backdrop of chaos and discord. Contrary to what Foreign Secretary Boris Johnson has said, Britain will not be “perfectly OK” in such circumstances; it will be confronting a series of political disasters unparalleled in its recent history.
The crux of the turmoil will spring from our abrupt departure from the single market, which guarantees the free movement of goods and services. As we fall back onto World Trade Organisation rules, tariffs will immediately be placed on goods travelling between Britain and the EU, which amount to 10 per cent for cars and an average of 20 per cent on agricultural products (perhaps over 50 per cent on beef). Both those industries could quickly implode in the UK, with farmers also clobbered by the loss of EU subsidies.
The pharmaceutical industry will also be hurt, and financial services will lose passporting rights to sell products into the EU. In the absence of a new equivalence regime, basic cross-border contracts and transactions could be blocked or delayed. Across these sectors, thousands of jobs will be lost, and in many cases transferred to the EU. So-called non-tariff barriers will also take effect, meaning, for example, th…