The warnings came after Theresa May secured the agreement of her Cabinet to step up preparations for no deal. Photo / AP
The warnings came after Theresa May secured the agreement of her Cabinet to step up preparations for no deal. Photo / AP
Bank of England Governor Mark Carney has claimed that leaving the European Union without a deal could be as big a disaster as the 2008 financial crash.
At a cabinet meeting on Brexit preparations, he told Prime Minister Theresa May that leaving on bad terms means dire consequences for the UK, the Daily Mail reported.
Sources told The Guardian that Carney suggested a no-deal outcome would slash house prices by 25-30 per cent over a three-year period.
He is also said to have claimed that unemployment will climb into double figures in terms of percentage.
Other problems he predicted include the stalling of transport links with the trading bloc.
One cabinet minister told the newspaper that Carney wasn't saying that everything he mentioned was going to happen but simply recognising the need to consider the worst-case scenario.
Another insider claimed the briefing was met with a "lot of broad agreement on the steps that we would need to take next to support the British economy in the event of leaving the EU on poor terms".
British business will be hit by a "sledgehammer" of red tape and higher costs if the UK crashes out of Europe without a deal, it was claimed.
The CBI (Confederation of British Industry) said a slew of new Government papers on how Britain would tackle a collapse in talks proved the dangers of failure in Brussels.
The warnings came after Theresa May secured the agreement of her Cabinet to step up preparations for no deal.
A tranche of papers on the impact of crashing out of the EU says motorists would need new £5.50 international permits to use their cars on the continent.
They also warn that if negotiations with Brussels fail ex-pats might be forced to retake driving tests after March next year, as their UK ones will no longer be valid.
Britons with less than six months to run on their passports would also have to renew before travelling to the EU - while traditional-style British blue passports will not start being issued again until late in 2019.
The government played down fears that holidaymakers would be hit with swinging roaming charges for using mobile phones in the EU - saying the biggest telecoms companies have agreed not to impose extra fees.
But in one of the most striking warnings, the documents predicted that the EU will refuse to share information with the UK about asteroids that could wipe out humanity.
The latest slew of "technical" notices were published after May put ministers on notice at a special Cabinet meeting that large-scale "no deal" Brexit plans will have to be activated if agreement has not been reached by mid-November.
The key revelations in the notices - designed to dispel EU doubts that the UK is really prepared to leave without a deal - included:
International Driving Permits, costing £5.50 each, would be required for the EU after March. The government will not start providing the permits until February next year - raising fears of chaos with huge numbers of people applying weeks before the deadline. Ex-pats will need to get driving licences for the countries where they reside and could be required to take tests again.
UK passports will not refer to the EU from March - but the traditional blue versions will not start being issued until the end of next year.
Britain will be reliant on the United States for surveillance and tracking data on asteroids, dead satellites or other debris falling to earth after a no deal Brexit.
The Common Travel Area will be honoured whether there is a Brexit deal or not - meaning Irish citizens will be able to travel to and remain in the UK.
Reaction to the no deal notices was dominated by business warnings of the additional red tape likely to be imposed on firms.
CBI director general said no deal would be devastating for firms.
Bank of England Governor Mark Carney. Photo / AP
She warned: "These notices make clear firms would be hit with a sledgehammer in the event of 'no deal'.
"They also illustrate the extent of the disruption consumers can expect if ideology wins over evidence."
Adam Marshall, director general of the British Chambers of Commerce said: "Firms still need greater precision from the government in order to be able to plan ahead with confidence.
"Many companies tell us they are deeply concerned by the impression that key information they need in order to prepare for change is being held back due to political sensitivities as the party conference season commences.
"Speed, precision and clarity are of the essence so that businesses can prepare for change."
Mike Cherry, chairman of the Federation of Small Businesses, said: "With each release of the Government's technical notes, we get a clearer picture of how dangerous and damaging a sudden no-deal Brexit will be for our small businesses.'
Shadow Brexit Secretary Sir Keir Starmer said: "We are less than 200 days until we leave the European Union and the Government still has no credible plan for Brexit. The Cabinet should be planning to negotiate a good deal for Britain, not planning for failure or blaming businesses for the Government's chaos.
"The only reason the Government is talking about no deal is because the Tory civil war on Europe prevents the Prime Minister from negotiating a good deal.
"With the clock ticking, Ministers should drop the irresponsible rhetoric and start putting jobs and the economy first."
One of the papers confirms that "International Driving Permits" would be needed across much of the EU if there is no deal.
"You may be turned away at the border or face other enforcement action, for example fines, if you don't have the correct IDP," the document states.
The document says the government will only start providing IDPs at most Post Offices after February 1 next year - which could fuel concerns about an administrative log-jam for people wishing to travel to the continent.
Currently they can only be obtained from around 90 Post Offices nationwide or by mail order from two private companies.
There are two types of IDP required by EU countries, depending on whether they have ratified the 1949 or 1968 conventions on road traffic - meaning some travellers will need both permits.
Motorists could be away at borders or face enforcement action if they have not obtained the correct documents.
The Department for Transport believes up to seven million permits could be requested in the first 12 months after Brexit.
The notice urges ex-pats to trade in their existing licences for one valid in the country where they live.
"If, after exit day, you become resident in an EU country you would not have the automatic right under EU law to exchange your UK licence for a driving licence from the EU country you're living in," the paper says.
"Depending on the laws of the EU country you move to, you may need to take a new driving test in that country."
Edmund King, president of motoring association AA, said: "This will be an extra burden for UK drivers wanting to take a holiday abroad.
"We are also disappointed that from the end of January next year the AA will no longer be permitted to issue IDPs as we have done for decades. We had campaigned to maintain the right to issue these permits, but the Transport Secretary has decided that IDPs will only be issued at post offices."
The assessment on passports says that if the UK has "third party" status, EU countries could demand at least six months is left before their expiry date.
"To avoid any possibility of your adult British passport not complying with the Schengen Border Code we suggest that you check the issue date and make sure your passport is no older than nine years and six months on the day of travel," it says.
Irish citizens will keep the right to enter and remain in the UK regardless of the Brexit outcome, the document says.
The paper also reveals that from next March the UK will start producing passports without a reference to the EU - and blue passports will be issued from the end of 2019.
Britain will be reliant on the United States for surveillance and tracking data on asteroids, dead satellites or other debris falling to earth after a no deal Brexit.
Britain's Secretary of State for Exiting the European Union Dominic Raab, right, and EU chief Brexit negotiator Michel Barnier speak in the hallway prior to a meeting at EU HQ. Photo / AP
The EU is currently building a system designed to protect satellites from crashing into other equipment or debris.
It also tracks material crashing back to earth on a "scheduled or unscheduled basis".
Without a deal, the UK will no longer take part in the EU Space Surveillance and Tracking programme, the notice reveals.
Labour MP Jo Stevens said: "It is deeply worrying that the UK will be shut out of some of the most cutting edge research in the world. This research provides thousands of high-tech jobs and provides the economy billions every year.
"Theresa May used to say wouldn't be the end of the world - but actually it could be!"
Britain's car manufacturers face new barriers to selling their vehicles into Europe if the UK crashes out without a deal.
They will have to get new EU safety certificates before they will be allowed to sell their cars into the lucrative market, as their car models would no longer be automatically recognised.
The Government paper says the firms will need to get the relevant documents from each EU country – potentially creating a major bureaucratic nightmare for the sector.
The paper states: "In a no deal scenario, type-approvals issued in the UK would no longer be valid for sales or registrations on the EU market.
"EC type-approvals issued outside of the UK, would no longer be automatically accepted on the UK market.
"This means that affected manufacturers would need to ensure that they have the correct type-approval for each market ...
"Manufacturers currently holding a VCA-issued [Vehicle Certification Agency-issued] EC type-approval, who intend to continue placing their products on the EU market, must obtain a new EC type-approval from a type-approval authority in an EU country."
Manufacturers who produce goods that are not currently governed by EU-wide rules would face major new hurdles to export into Europe after a no deal.
Currently, anything that meets UK regulations but which is not subjected to harmonised EU rules can be sold anywhere in the single market. This is known as "mutual recognition".
The products involved include significant sectors for UK industry, including the historic textile trade and products such as bicycles – an area which includes high profile British brands such as Brompton.
After a no deal Brexit, mutual recognition would no longer apply – meaning goods would have to meet regulations in the country in which they are sold.
Because the products concerned are not subject to EU-wide rules, this could mean manufacturers having to meet 27 sets of regulation.
Importers would also have to ensure non-harmonised good brought into Britain meet UK rules.
The notice on satellites and space programmes confirms the UK and British firms will be blocked taking on future work on Galilo, the EU's equivalent to GPS.
Devices that use the satellite network will continue to work as normal meaning consumers should see no impact.
But the UK will be excluded from encrypted parts of the system due to come online by the mid 2020s, despite British investment in the network.
Business, academics and researchers could also lose out and those with existing contracts are at risk of penalties.
The report confirms £92million has been set aside to explore the possibilities of a UK Global Navigation Satellite System – but not to actually develop one.
The Home Office has published assurances that a no-deal Brexit will not alter the terms of the Common Travel Area which allows British and Irish citizens to live, work and receive welfare benefits in one another's countries.
In one of a set of no-deal preparation papers issued by the Government, the Home Office confirmed that the CTA, which dates back to the 1920s, would remain in place in the case of the UK leaving the EU without a deal.
"If you are an Irish citizen you would continue to have the right to enter and remain in the UK, as now," said the paper.
"You are not required to do anything to protect your status."
Where required, domestic legislation would be updated in the event of no deal, to guarantee reciprocal rights including the right to work, study and vote, access to social welfare benefits and health services.
There would be "no practical changes to the UK's approach to immigration on journeys within the CTA" and "no routine immigration controls on journeys from within the CTA to the UK".
Britons getting a divorce from an EU national or in a child custody battle face being stuck in limbo if Britain crashes out without a deal, the technical papers also war,
Currently, EU legislation covers civil courts – meaning that judgements passed down by British courts are automatically recognised across the other 27 member states.
But a no deal Brexit would pull the plug on these agreements meaning "there would be no agreed EU framework for ongoing civil judicial cooperation between the UK and EU countries".
Ministers said they would scramble to put in place other laws, but warned Britons affected that they should seek legal advice.
It adds: "We will seek to provide legal certainty for businesses, families and individuals who are involved in ongoing cases on exit day.
"Broadly speaking, cases ongoing on exit day will continue to proceed under the current rules.
"However, we cannot guarantee that EU courts will follow the same principle, nor that EU courts will accept or recognise any judgments stemming from these cases. Individuals with cases in progress on 29 March are encouraged to seek legal advice on how this may affect them."
Meanwhile, Brexit Secretary Dominic Raab has opened another flank in the Brexit battle by threatening to slash the £39billion "divorce bill" if Brussels refuses to compromise.
Speaking on BBC Radio 4's Today programme, Raab said one of the consequences of a no-deal Brexit "is that obviously we wouldn't pay out the money that has been agreed as part of the withdrawal agreement".
The said the UK would "recognise our strict legal obligations" but that the amount paid would be "significantly, substantially lower" than the £39billion.
There are claims the figure could be more than halved if the EU blocks an agreement and the UK could slow down the timetable for paying the balance.
Raab issued a stark warning to Tory Brexiteers - and some Remainers - who have criticised May's Chequers plan, saying they will merely increase the chances of a no-deal outcome.
"I do appreciate the concerns on all sides," he said.
"But when push comes to shove, there will be the choice between the deal that I'm confident we can strike with the EU and the no deal scenario.
"We are making sure we are ready for the latter. But I think it would be by far the optimum outcome to have a negotiated deal, and I think that will focus everyone's minds."
Raab's comments echo May's statement yesterday that Britain's £39billion divorce offer to Brussels will be slashed if the EU fails to grant a comprehensive trade deal.
The Prime Minister insisted it was a "specific offer" made on the expectation of an acceptable agreement.
She warned the bloc that without a deal "the position changes". May stressed that the UK was "a country that honours our obligations". But sources suggested the divorce payment could be slashed by more than half if there is no deal.
May said: "The specific offer was made in the spirit of our desire to reach a deal with the European Union and on the basis, as the EU itself has said, that nothing is agreed until everything is agreed. Without a deal, the position changes."
