With Brexit just six months away, the UK and European Union seem no closer to reaching a full exit agreement.
As the 29 March deadline approaches, the reality of a “no-deal” scenario is becoming more possible each day. British Prime Minister Theresa May has warned sceptics that the alternative to her potential Brexit deal with the EU is no deal at all.
According to a report by London-based think tank Institute for Government, if a deal is not reached, the UK is not ready to "mitigate major negative impacts" in nine of the 10 policy areas — ranging from agriculture and fisheries to the law and migration — being discussed in the Brexit implementation.
Questions about financial instability post-Brexit are also mounting as the International Monetary Fund (IMF) predicts Britain’s economy will be hit hard if the country leaves the EU without a deal.
So how unprepared is the UK in a 'no-deal' scenario?
The Institute for Government breaks down exactly how below:
The UK Government aims to minimise change, but new requirements in areas like customs and controlled goods are unavoidable. The EU’s response is likely to put major demands on traders.
One key issue in striking a deal between Britain and the EU is the issue of ensuring there will be no hard border between Northern Ireland and the Irish Republic after Brexit.
Citizens and migration
There is still no clarity on the rights of EU citizens after March 2019 or the process for settlement. The UK Home Office has already done significant work to prepare the system for EU residents in the UK, which could be used if the UK makes a unilateral offer in case of no deal.
In turn, free movement could continue for EU citizens coming to the UK, minimising changes. There is no clarity on the position of UK citizens in EU countries if there is no Withdrawal Agreement — this is the responsibility of each individual member state to dictate policy.
Agriculture, fisheries and food
Implementing new systems for managing agriculture and fisheries, ensuring supply chains are maintained has become a challenge for the island nation. The UK has guaranteed current funding for farmers until the end of the current payment cycle.
There is no clarity over the UK’s approach to fishing and quotas after Brexit. It is likely that exports from animal or plant origin to the EU would be prohibited after Brexit but it is not clear how the UK Government plans to mitigate or manage this.
The UK Government has proposed the correct steps to ensure continuity, accepting EU authorisation and approvals. However, complex supply chains such as medicines and medical devices could cause a major disruption as the EU is unlikely to take the same approach. The National Health Service (NHS) has complained of insufficient detail from the UK Government, with little contingency work happening just seven months before Brexit day.
Funding the NHS was a key talking point for Brexit supporters, who campaigned the £350 million sent to the EU each week was better served funding the British NHS.
The Government is working with the Post Office to increase capacity for processing international drivers’ licences; but the National Audit Office (NAO) noted that as of July, the Department for Transport did not have detailed delivery plans.
There is also no clarity about how the Government intends to ensure continued UK access to international agreements on aviation.
Preparing for changes to regulatory regimes and terms of access to the EU market is another difficult task for Westminster. There are preparedness notices published on banking, insurance and other financial services as well as telecoms and broadcasting, but there is little public information for businesses in other sectors.
Energy and the environment
The UK has promised a new environmental watchdog to replace EU functions, which it has been running a consultation on. However, there’s unlikely to be sufficient time to have it in place by March 2019. New public bodies have taken two to three years to get up and running in the past- well beyond the Brexit deadline.
Competition, tax and data
The Competition and Markets Authority is expanding to handle an increase in the volume and complexity of its cases, as it takes on the responsibilities of the European Commission for the UK. CMA would lose access to EU intelligence sharing arrangements to assist enforcement in no deal scenario. Then reliant on bilateral agreements to mitigate impact, and no guarantee of those.
Law and justice
The Government has not published a no-deal notice in this area. It is unclear whether the Government needs additional legislation before a no deal to keep holding individuals arrested on a European Arrest Warrant.
Without a deal, current co-operation with EU law enforcement bodies will cease. The UK will have to rely on outdated or less secure methods to work with EU counterparts.
And in what areas are the UK prepared for a no-deal?
Ensuring current beneficiaries do not lose out and benefits are maintained is the only category unaffected by a no-deal Brexit decision.
The UK government has guaranteed that UK beneficiaries of EU funds will continue to receive funding until the end of 2020, regardless of the outcome of negotiations. The no deal notices in this area provided details of how UK organizations can claim their funding from the Government if necessary.
The next six months will answer the question of what the EU will look like with the UK on the outside.
Brexit is currently set to happen regardless of whether the UK reaches a deal with the EU, even as London Mayor Sadiq Khan called for a second Brexit vote over the weekend.
The UK’s readiness for life outside the bloc could depend on the progress of domestic preparations, as well what Brussels can agree on and how that is received in Westminster.