Trade takes a hit

Under this cliff-edge, the UK would be forced to trade with the EU under World Trade Organisation (WTO) rules. Currently, goods moving between the EU and UK don’t need to be checked at borders and face no tariffs, and complex supply chains in industries like car-making cross national boundaries.

But under WTO rules there would be immediate customs and regulatory checks and the UK and EU would have to pay tariffs on each others’ goods.

This isn’t something the EU can just opt-out of: the WTO effectively requires countries to charge the same tariffs to countries they don’t have a trade deal with, a rule called the “most favoured nation” tariffs. Grant someone a special favour, and you have to do it to all members.

A parliamentary report into a no-deal concluded that “this would almost certainly involve the immediate imposition of tariffs across a range of sectors”.

Some tariffs would be more significant than others: the highest would be on British farmers, who would face 30-40 per cent charges for exporting to the EU, effectively making many exports unviable. Lower tariffs would be on things such as automotive parts, where a 5 per cent charge would apply.