Hello and welcome. My name is Sophia Bash and you're listening to the CER podcast.

I'm here today with John Springfield and Simon Tilford. John is our director of research here at the CER and Simon is our deputy director.

And we're here to talk about the

Brexit mantra that has been repeated several times by Theresa May over the last couple of months

that no deal is better than a bad deal in Brexit negotiations and without wanting to skip ahead

to your conclusions I think it's fair to say that both John and Simon are

skeptical of that statement. First, maybe Simon, how big really is the chance that there will

be no deal between the EU and the UK? How could that happen? I think the chances of no deal

are still slim, but far from impossible, it could come about.

For example, if Britain and the EU fail to reach an agreement on Britain's Brexit bill or over the rights of their respective citizens,

or maybe Britain will bulk at a transition deal that provides

for the continued jurisdiction of the ECJ or freedom of movement. So I think it's probably only

it's a slim chance, but it's not beyond the realms of possibility that Britain could crash out without any deal in place.

Now, if that were to happen, if talks were to break down, if no transition agreement was to be arranged,

if the UK would run out of time today, what would be the first thing that would happen tomorrow, John?

The first thing that would happen would be that tariffs were applied on Britain's exports to the EU.

And this is a particularly big problem in agriculture because tariffs are very high.

There's a lot of protectionism.

The EU's agricultural market is pretty highly protected. So those farmers that exports the EU would

have big tariffs slapped on their produce and they would be uncompetitive so we'd see big falls

and agricultural exports to the EU. But manufacturers would also see some big problems. Although

tariffs are lower in those in manufactured goods than they are in

...