To ask Her Majesty's Government, further to the remarks by the Lord Privy Seal (Baroness Evans of Bowes Park) on 21 January (HL Deb, col 570), what estimate they have made of the tariffs which would be paid to the UK by (1) EU exporters on goods sold in the UK, and (2) UK exporters on goods sold in the EU, in the event of a no-deal Brexit under World Trade Organisation terms.
If the UK were to leave the EU without a deal in place, Most Favoured Nation tariffs would apply to bilateral trade. Assuming the UK and EU’s current MFN rates were applied, UK exports to the EU would face tariffs of around £6bn per year and EU exports to the UK would face tariffs of around £14bn per year. This is an estimate based on average trade data for 2015-17 and assumes that trade patterns remain unaffected by the imposition of tariffs. The actual value of trade and the amount of duties applied between the UK and the EU in this scenario would depend on how UK and EU firms and consumers respond to the introduction of tariffs.
The Government wants to avoid these potential barriers to free trade and believes that the best option for both the UK and the EU is for us to leave with a deal. This Government wishes to have the greatest possible tariff-free trade with our European neighbours and for this reason we remain determined to secure a deal.