That a no deal Brexit will damage the British and European economy was already clear. The Catholic University of Leuven even calculated that a no deal Brexit would cost the European Union 1.54% of GDP and 1.2 million jobs. The effect for the UK: a 4.4% reduction in GDP and 525,000 job losses, this only in the short term. In terms of sectors, a hard Brexit would have especially a severe effect on the European Food and Beverages sector. A hard Brexit would also have a big impact on the European textile industry and in addition, services sectors would be heavily affected.
Due to the severe economic consequences of a no deal, Members of Parliament (MPs) from both the Conservative Party as the Labour Party tabled an amendment on the parliamentary estimates bill that would deny funding to four government departments in the event of a no-deal Brexit without explicit parliamentary approval. The amendment concerned the departments for International Development, Work and Pensions, Education, and Housing, Communities and Local Government. However, the Speaker of the House of Commons, John Bercow, said on 1 July that he had not selected this amendment. Grieve and Beckett have, therefore, re-submitted their amendment on 2 July, but 10 Downing Street has strongly condemned this amendment to shut down the government as very irresponsible.
Not only the MPs are concerned, but also Brexit Secretary, Stephen Barclay, asked last week to accelerate the preparations for a no deal Brexit. Barclay said: “Time is of the essence and we can’t be complacent. I do not want to be in a situation when we get to November and there were things we could have been doing at this time and we didn’t do them.”
Key players in a possible no deal Brexit are of course Boris Johnson and Jeremy Hunt, the remaining contenders in the Conservative Party leadership race. In his bet to become the next leader of the Conservative Party, Foreign Secretary Jeremy Hunt presented his ten-point plan for delivering Brexit in case he wins. Hunt proposes to speed up the no deal preparations, the establishment of a No Deal Cabinet Task Force and the appointment of a new negotiating team. A Government under his leadership would prepare for a No Deal Brexit Budget, and the Treasury would prepare a No Deal Relief Programme including a £6 billion fund for the fishing and farming sectors.
Boris Johnson, on the other hand, has said that he believes there is only a “very, very small possibility” that the UK will have to leave the EU without a deal. However, he also said that when he is elected as new Prime Minister, every member of his Cabinet should have to live with the possibility of leaving the EU without a deal. This is also in line with the fact that Johnson is preparing an emergency budget for such a scenario. More concretely, this budget will consist of a tax cut and a revision of stamp duties to safeguard the economy after a hard Brexit.
Conservative Party members will receive their postal ballots between 6-8 July. The final deadline to return the ballots is Sunday 21 July. Boris Johnson and Jeremy Hunt participate in hustings until 17 July. It is widely believed, however, that a majority of voters will immediately cast their vote when they receive their ballot. The next few days will, therefore, be key for Hunt to get his message across and for Johnson to avoid any gaffes. In the week of 22 July, Britain’s new Conservative Party leader and Prime Minister will be announced.