No-Deal Brexit Looms, Brits Scramble

Julija A. Image
ByJulija A.
August 19, 2019

The chances of a no-deal Brexit are increasing each day — and the consequences for the UK could be disastrous, according to classified government documents that were leaked to the Sunday Times, a popular British newspaper.

Here are the key takeaways from the report:

  • 50% to 85% of trucks traveling across the British Channel could be unprepared for French customs.
  • Port disruptions could reduce traffic by 30% to 50% for up to three months.
  • Heavy-goods vehicles could experience a delay of 1½ to 2½ days before crossing the border.
  • Supplies of medicines and medical supplies could dwindle due to shipping disruptions.
  • The EU will likely sharpen immigration laws and border checks, leading to delays at crossings.
  • Supplies of drinking water and certain foods are likely to decrease. The supply chain could be disrupted because chemicals, ingredients, and packaging used in food production will be in short supply. While it’s unlikely the UK will face food shortages, prices are likely to increase.
  • Public water services should remain unaffected. There is a small risk that the UK won’t be able to import certain water purifying chemicals.
  • The UK will likely cease trading in gas with the EU because tariffs will make the practice uncompetitive. Existing UK policy establishing 0% tariffs on gas imports will make it difficult to mitigate the impact on refinery margins and profitability. This could lead to big financial losses, the closure of two refineries (that will be converted to import terminals), and the loss of about 2,000 jobs.
  • The UK will impose a “no new checks with limited exceptions” model at the borders. The government wants to avoid the return of a hard border between Northern Ireland and the Republic of Ireland.
  • A lot of protests and counter-protests are likely to happen after Brexit. They will use up a lot of police resources and cause a rise in public disorder and community tensions.

Government preparations for a “no-deal” Brexit are called “Operation Yellowhammer.” The Sunday Times reported that the predictions were compiled by Britain's Cabinet Office this month, and that they were available only to those with “need to know” security clearance.

The government commented officially on the claims, characterizing the documents as outdated. The government says it has made preparations and found ways to minimize the impact of a no-deal Brexit.

Economics experts and Brexit critics have warned that exiting the European Union without a formal agreement is likely to have a very negative impact on the British economy. Currency devaluation, supply shortages, and general instability are very serious threats, but UK leaders have not managed to make an agreement with Europe.

Boris Johnson, the new prime minister, has promised to get Britain out of the EU within the first 100 days of his tenure come what may. He is set to meet with German Chancellor Angela Merkel and French President Emmanuel Macron this week. He says he intends to press for a new deal and attempt to break through the stalemate in negotiations.

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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