Boris Johnson has warned a no-deal Brexit is still the ‘most likely’ option despite a fresh round of trade talks this week.
If that happens, EU trading rules will suddenly cease to exist in the UK on January 1 at the end of our transition period.
You’ve probably heard a lot about what this means in boring, indecipherable terms – from export declarations to WTO tariffs.
But what would no-deal actually mean for you and your family?
UK-EU trade is worth £660bn a year – 43% of our exports and 51% of our imports – so no-deal would affect many areas of your life.
It would likely have an impact on food and clothes prices, medicines, cars and our motorways.
It could also trigger job losses in the long run as our economy grows less than it would have done, and firms choose to invest elsewhere.
The EU is making contingency plans, and the UK government is drawing up plans for billions of pounds of support for worst-hit sectors.
Those sectors getting a government bailout could include sheep farmers and others in agriculture; chemicals; the car industry; and fishing.
But that won’t wipe out the impact on you if we fail to get a trade deal. Here are 11 things that will or might happen from January 1.
1. Food prices look set to rise
Tory ministers, experts and the chairman of Tesco have all conceded food prices look likely to rise if there’s no trade deal.
That’s because 26% of all food consumed in the UK last year was imported from the EU – and it’d be slapped with trade tariffs overnight.
According to Which?, tariffs would add 22p to a 300g pack of Danish bacon, 56p to 400g of cheese, 40p to 250g of butter, 26p to 300g of chicken and 8p on three yoghurts.
Environment Secretary George Eustice and Foreign Secretary Dominic Raab admitted prices could go up by about 2%.
And Mr Raab said prices could also be affected by “things like the cost of fuel and transportation”.
Some British products like lamb could become cheaper if they become too expensive to export, meaning the market here is flooded.
But Tesco chairman John Allan said tariffs “almost inevitably are going to lead to higher prices” in the supermarket giant.
2. Chaos at the borders and on the roads
There could be chaos at Britain’s borders whether we get a deal or not.
But in a no-deal Brexit, it’ll almost certainly be worse.
Importers and exporters will have reams of new paperwork from January 1, due to us leaving the EU’s single market and customs union.
Without a trade deal, these checks could take more time and there’d be more to do on top.
The Cabinet Office admitted: “We’ve chosen to stage the introduction of our new border requirements – but the EU has not.”
Areas around Britain’s largest ports like Dover, Kent, have spent months preparing for disruption.
Kent has a moveable barrier to queue lorries on the motorway, and trucks leaving Britain will need a ‘Kent passport’ to enter the county.
Meanwhile seven of 10 huge new lorry parks are due to open inland, to hold trucks in a queue far from the border itself.
But despite the attempts to separate out trucks, any congestion at borders or in the Channel Tunnel could impact Brit families too.
Maidstone Grammar School, which is near Kent’s M20 motorway, is staying shut for two days to avoid parents being caught up in traffic.
The government says it’s hired 900 more officers to man the border and 1,100 are to be recruited by March.
3. You may have less choice in the supermarket
Disruptions at the border (see above) could cause delays in importing food – and with them a shortage of short-shelf-life favourites.
According to the Sunday Times, supermarkets are stockpiling food amid fears vegetable shortages could go on for three months.
Foreign Secretary Dominic Raab insisted “we’re not going to see shelves running bare”. But some foreign foods might be substituted with others from within the UK.
Even where products are available, families may feel they have no choice but to pick British alternatives if EU products are pricier.
Tesco chairman John Allan said no-deal Brexit could “change the mix of what people eat”. For instance, he said, more people might buy British cheddar if the cost of French Brie goes up by 40%.
4. You might not be able to get fresh German Bratwurst at all
British bangers could be barred from the continent and vice versa if there’s no Brexit deal, industry chiefs fear.
The British Meat Processors Association says there is “no export health certificate in existence” to cover chilled meat exports after Brexit.
It’s understood UK officials want to agree permanent arrangements on these exports – including sausages – as part of a broader Brexit deal.
That would allow Lincolnshire sausages to be sold in Paris, and German Bratwurst to be sold in South Shields.
Such is the legal dilemma that negotiators have had to arrange a special six-month window to allow the UK to send sausages – to itself.
From January 1, ‘animal origin’ products that are sent from Britain to Northern Ireland will be subject to EU rules and checks.
EU and UK negotiators have agreed a special carve-out that means chilled meats can continue to travel to Belfast until at least July.
5. Clothes could become more expensive
Roughly a third of the UK’s £20.8bn in clothes imports last year came from the EU.
If there is a no-deal Brexit, they’d be slapped with tariffs including 12% on trousers and blouses – the same fee already paid for clothes from outside the EU. That could mean a £40 Italian blouse cost an extra £4.80, for example.
Meanwhile, British fashion houses exporting to the EU would be very hard-hit.
We exported £5.3bn of clothing to the EU last year – roughly three-quarters of all our clothing exports.
British clothes exports would face average EU tariffs of 11.5%. This might make UK clothes cheaper over here, if homegrown lines flood the market, but it’d come at a heavy cost to firms and jobs here.
6. Medicine could be disrupted
A Department of Health letter in November warned the flow of goods across the Channel “could reduce to 60% to 80% of normal levels” from January 1. The “most significant disruption” would be in the first three months.
That means the government has had to put contingency plans in place for medicines, many of which are critical to people’s lives.
Four ferry companies signed deals worth £87m in 2019 to continue getting medicines to the UK in a no-deal Brexit.
More than 3,000 lorries a week will be mobilised to bring essential drugs and medical equipment into the UK in a no-deal, according to the Mail on Sunday.
Dominic Raab insisted the UK has “enough diversity of supply” of medicines in the case of a no-deal Brexit.
Meanwhile ministers have a series of five contingency plans to get the Covid-19 vaccine into Britain – including an RAF airlift.
7. Cars become more expensive
No deal would result in 10% tariffs on car imports to the UK, adding £1,900 to the average cost of a car from the EU.
But when it comes to the wider economy and jobs, the UK’s exports to elsewhere could be the biggest problem.
The UK’s car industry risks losing £55bn in manufacturing value within five years in the event of a no-deal Brexit, industry analysis claims.
British car production could drop below 1m cars a year if there is no deal, compared with more than 1.3m in 2019, because tariffs would make large parts of the UK business unviable, said forecasts commissioned by the Society of Motor Manufacturers and Traders.
And a no-deal Brexit would jeopardise the future of UK plants.
PSA Group has said it will only build its new Vauxhall Astra in the UK if there is a trade deal, while Nissan has said the business model of its Sunderland plant – the largest car factory in the UK – would be destroyed.
8. The pound could fall even further
Dominic Raab admitted the pound’s value may fall further if there is a no-deal Brexit.
The Foreign Secretary said there had been already been “currency fluctuations” and “some of that is already baked in”.
He claimed it could be a silver lining for British exporters who would find their businesses more profitable overnight.
But it would make holidays more expensive for Brits going to the EU, when they eventually start travelling again after Covid.
The pound was recently worth about €1.09, after it plunged from around €1.30 on the night of the 2016 referendum and never recovered.
9. Job losses due to the big hit to the economy
The Office for Budget Responsibility said a failure to reach a free trade agreement with the EU will “compound” the massive impact of Covid.
The pandemic caused the biggest fall in economic output in 300 years in 2020, with 11% of GDP being wiped out.
According to the OBR, a no-deal Brexit could delay the UK’s recovery from coronavirus by “almost a year” to autumn 2023.
It would also knock 2% off GDP initially, the OBR said.
The governor of the Bank of England, Andrew Bailey, predicted in November “the long-term effects” of no-deal will be bigger than those of Covid.
The President of the British Chambers of Commerce, Ruby McGregor-Smith, has warned of “significant job losses” in a no-deal.
Estimates have suggested no-deal could add 200,000 unemployed to the 1.6million already out of work because of Covid.
But there is no one true figure of how many jobs might be loss, as many cuts might only be an indirect result of Brexit.
10. More practical duties for businesses
In practical terms, if you don’t run a business you might not see a direct impact on your family straight away.
For business owners, if we don’t do a deal, the UK Global Tariff will apply to goods you import from the EU from 1 January 2021.
It applies to imports from all countries, unless you are importing from a country that the UK has a trade deal with, a country that is part of the Generalised Scheme of Preferences or where an exception applies.
Use the tariff lookup tool to check the tariffs that may apply to goods you import from 1 January 2021.
Most traders with a good compliance record will be able to defer declarations on most goods for up to six months after 1 January 2021.
You can get more information here.
Brexit trade deal talks have been held up over three issues.
Fishing: The two sides are split over two issues – quotas and access. In 2012-16, 56% of the fish in UK waters was caught by EU boats and 44% by UK boats. Britain wants both more quota to catch its own fish, and ultimate control over who accesses the waters. Reports suggested the EU was prepared to return 18% of its current quotas to UK fishermen, but Britain demanded 80%. And the UK offered a three-year transition to having control, but the EU reportedly wanted 10 years.
Level playing field: This means how closely we follow EU rules in the future, to stop us undercutting businesses on the continent. The UK wants to be free to set its own laws in areas like labour, environment, climate, and subsidies for businesses (“state aid”). But the EU demanded “equivalence”, with the UK “mirroring” EU rules in future. The EU later dropped this demand and said Britain could diverge from EU rules, it would just face tariffs if and when it does so. There are still fears this could lead to “lightning tariffs” when the EU passes a new law on, say, the environment and Britain chooses not to copy it.
Governance: The final key dispute is about how any future disagreements between the UK and the EU on trade are resolved. The UK is confident there will be no role for the European Court of Justice but the exact arrangements are still being drawn up. For more information click here.
11. Flights, buses and hauliers could all be blocked (from July)
The EU has had to put contingency plans in place to stop flights being grounded and trucks and buses stopped at the border.
EU documents say without that backup plan, “air traffic between the EU and the United Kingdom will be interrupted”.
British truckers would have to use one of a severely-limited number of permits when they bring freight to the EU.
And London to Paris coach services, for example, “would have to be interrupted”.
Negotiators hope all these issues will be covered by future deals. For now, there are interim arrangements to keep them going until July 1.
What about if there IS a trade deal?
All the above problems would (mostly) be solved if the EU and UK agree a trade deal.
But there are some things that will change permanently for Brits visiting the EU, whether we get a trade deal or not.
These things are just a natural consequence of Brexit, which happened on 31 January 2020.
They include having to renew your passport at least six months before you travel to the EU to avoid being turned away.
You won’t need a visa for trips under 90 days. However, Brits may be banned from entering the EU for holidays due to coronavirus rules.
You also have to ensure you have the right travel insurance, because European Health Insurance Cards will no longer be valid.
People who want to drive in the EU can no longer just use their UK driving licence, and may need a £5.50 International Driving Permit and an insurance green card.
Mobile phone companies will be legally free to bring back roaming charges for Brits when they visit the EU.
And pet owners will no longer be allowed to use a pet passport to bring their dog, cat or ferret into the EU, with fresh approval needed up to a month before each trip.
On the plus side, duty-free shopping when visiting the EU will return.
You can read much more detail about all these things here.