TUC report on impact of No Deal published

New report sets out the cost to working people of crashing out of the European Union.

The TUC has accused the government of trying to keep the public “in the dark” about the true impact of a no-deal Brexit.

A new TUC report – published at the weekend after a review of a range of literature – has set out what the TUC calls the devastating cost that crashing out of the EU would have on jobs, rights and livelihoods.

And it outlines the damage the TUC believes a No Deal would cause to public services and communities.

Some key finding are that:

Women, Black, disabled and LGBT+ workers would be at particularly high risk of their employment rights coming under attack – EU law has significantly enhanced UK legal protections for these groups;

Over the longer term, a no-deal Brexit would mean that the UK government could not be stopped from removing from UK law the hard-fought for employment protections that working people benefit from;

There is potential for up to 482,000 job losses and a potential loss of £4 billion in income tax and NI receipts;

Real wages are likely to fall – up to 10 per cent in the government’s analysis;

Those on the lowest incomes are likely to be hit the hardest, with the OECD estimating that household incomes could reduce by between £3,200 and £5,000 by 2030;

An already fragile market of adult social care providers risks failure due to increased costs driven by inflationary pressures. The ‘Operation Yellowhammer’ document suggests there is a risk that small providers could fail within 2-3 months of No Deal and larger providers within 4-6 months;

In addition to future spending pressures, the public sector will – immediately – be affected in terms of staff and expertise, and for the NHS in terms of access to clinical trials, equipment and medicines, which could see a six-month increase in the time it takes for new drugs to reach the UK market;

If the UK leaves the EU without a deal, workers in the UK will immediately lose the ability to take challenges to the European court, and its vital judgments will no longer be binding in all UK courts. This means that it will be harder for workers to enforce their employment rights;

Loss of funding from EU bodies is a concern across multiple sectors;

No Deal will affect a variety of sectors, but services, agri-food, manufacturing (automotive, pharmaceutical, chemicals), science, tech and R&D could feel No Deal acutely and quickly due to tariffs and non-tariff barriers (loss of mutual recognition of qualifications and regulatory frameworks etc.);

The immediate impact on customs and border teams could be huge, with ports coming to a complete standstill. Currently less than 1 per cent of lorries arriving or leaving through Dover or the Channel Tunnel require customs checks;

In addition:

No Deal will negatively impact UK GDP in the long-term anywhere up to 10 per cent. More immediately GDP could be affected by up to 2 per cent. Any reduction of this scale on the size of the economy will have significant impacts for jobs, wages and available funding for public services;

FDI is likely to reduce in the long term by around 24 per cent, and overall business investment by 3.5 per cent;

Productivity is also likely to decrease in the long term by around 1 per cent;

The immediate cost to the public finances of a no deal could be up to £90 billion; and

The government’s analysis projects an increase in net public borrowing of between £96 and £141 billion by 2035/2036.

While all Brexit scenarios are likely to have a negative impact on the UK, the report says, the most extreme and the most damaging of these scenarios is a ‘no deal’ and then by default the UK trading on WTO terms.

The government’s own long-term economic analysis backs this up, suggesting that over the course of 15 years, the negative impact on UK Gross Domestic Product (GDP) could be between 5 and 10 per cent (7.6 per cent average) which would vary across the regions and nations of the UK.

And the House of Commons Exiting the European Union Committee, in its latest report – published in July of this year – concluded that, even by the government’s own standards, ‘a “managed no deal” cannot constitute the policy of any responsible government’.

Remarking on this, the General Secretary of the TUC, Frances O’Grady, said the government was deliberately keeping people in the dark about the true impact of No Deal.

“The fall-out would be felt for generations to come – hitting our jobs, livelihoods and rights at work. And putting at risk peace in Northern Ireland.

“A no deal is not a clean break. It will jam the gears of government for years,” she added.

“And it will stop us rebuilding our public services and communities and repairing the damage austerity has caused.”

To read the TUC’s report, click here.