What will next April be like? I suggest April is the moment of concern simply because we will leave the EU on 29 March with no guarantee of a transitional deal, but I assume it will take a few days for the shock to hit.
I make the point deliberately that a shock will hit. I am well aware that millions of people cannot work out what the fuss about leaving Brexit is all about. As far as I can tell, they think leaving the EU is about as hard as leaving a pub: you decide to go, walk out and let the door slam behind you, appears to be their attitude. I don't wish to to be patronising when saying that: I am instead reflecting what appears to be the commonly held incomprehension that there is any issue to deal with here.
The biggest shock of Brexit will, then, be the dawning reality that leaving the EU changes a lot, and at the same time very little. For example, there will be no mass expulsions of migrants from the UK. That's going to disappoint many. That was, many think, what this was all about. At the same time there will be economic chaos.
Again, I use the word deliberately. Let's assume that somehow or other the most potent indications of separation will not happen. Let's assume then that, against the odds, planes do still fly to and from the EU. But let's assume there is Hard Brexit, without agreement, because nothing else seems plausible right now.
This will men that planes might fly and ships might sail. But how long it then takes to get into and out of the UK is anyone's guess. Unless the UK decides to abandon all border controls, the flow of people into the UK will take longer than it did before. And IT systems previously shared with the EU probably just won't work. But we may get round this by simply giving up migration control. But the EU, I think we can be fairly sure, will not be so relaxed. Getting out of this country next year is likely to be hard work.
However, people will be the easy bit. It's goods that matter. And again, even if we decide to throw open our borders (with considerable risk to loss of existing tariff revenues arising as a result) there is no prospect of other countries doing so, in my opinion. The EU will impose tariffs on UK sourced goods, and these and VAT on import will be collected, as they should also be in this country, without (it has to be added) the advantage of EU based IT systems.
I am not saying the additional time per consignment need be much. Only a fractional increase is required for chaos to ensue, and we in the UK (at least) have done nothing to prepare for this, at all. Nor, I suspect, have we now got any time to do so. The warnings have been given, time and again, and have been ignored. The consequences will follow.
Most suggest these consequences will arise from reduced investment and problems in complex supply chains criss-crossing the EU into and out of the U.K. I accept that there will be problems there. This will happen. Investment is already declining in anticipation of this. Disinvestment is likely soon.
But this dimension, and the loss of jobs, will be for the long term. In April 2019 the problem will be short term, fundamental, and catastrophic.
Every truck stuck at a port will not be working. It will take days for supply chains to collapse as all trucks will go into short supply as there will be simply too many at ports.
Paying for trucks to do nothing will cripple those hiring them.
The possibility that VAT will be due on import will be devastating for the cash flow of many small businesses.
And goods will simply not arrive. Some will perish, and the owners will not be able to sustain the losses.
Some will be too late to be useful, and payment disputes will proliferate.
And people will stand idle as all this goes in.
Losses will mount.
I think all this is foreseeable. In precisely which order, and what timescale I am not sure. But in April 2019 seems likely to me. And the result will be a national cash flow crisis.
Business survives on keeping money moving. As we know, money is nothing more than a promise to pay. If the delivery on that promise is delayed - and that, I think, will be the inevitable consequence of Brexit - then a cash flow crisis follows. And in business, one broken promise leads to another, which leads to another. No one can be sure where a crisis at the ports created by Customs delays will lead. All I can be fairly sure of is that it will lead quite quickly to a cash flow crisis for importers, exporters, hauliers, those who depend on them, and into the wider economy. And at the same time I suspect a simple shortage of trucks will have a massive knock on effect in the national economy as well.
Anyone who knows anything about business knows that it is cash flow crises that kill businesses. It's not, in my opinion, tariffs, changed regulation, the Irish border, disinvestment or anything else that will deliver mayhem in the UK next year. It's something much more prosaic that will do that. It will be giant traffic jams at ports that will impose lasting damage on the UK. So many businesses will suffer crippling cash flow problems the impact could be massive, and cumulative of course.
Mark Carney has said he may need to reduce interest rates to compensate for Brexit. He's not got much scope to do so. And the cost of money will not be the issue next year. It will be its absence that will matter as debts do not get paid. This is the coming crisis of Brexit. And it is beyond Mark Carney's reach to address it.
The government could though. It will be the only creditor able to waive what is owing next year and survive the experience. PAYE, VAT and other sums owing may have to be put on hold if business is to survive Brexit, in my opinion.
But, and let me make the point very loud and clear, that will require a government that understands money; the nature of debt and the the indifference government can have to accumulating deficits if they are used to keep the economy going, as will be the requirement next year. Without that understanding, and if the government imposes its own cash flow demands on business next year as it faces a crisis not of its own making, then the government could make things very much worse. And that is what I fear will happen.
I just hope I will be proven wrong, but systemically, this is, I think, by far the biggest and potentially most dangerous crisis Brexit might create, and the most urgent that has to be addressed. But I am not hearing that this is happening.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I see what I consider to be evidence of this happening already. Yesterday the large supermarket that I use regularly had very low stocks of fresh fruit and vegetables. The shelves were almost empty for potatoes, tomatoes, lettuce and herbs among other things. When I enquired the reason was given that the suppliers were unable to get their produce to the distribution warehouse. This must therefore affect more than just my local store. Is it because there isn’t the staff to pick the food, or is it that there aren’t the qualified drivers to get it to the warehouse?
At the same time our green waste bins have not been collected. I contacted the council and the reason that I was given is that there are insufficient HGV drivers, so they are having to prioritise household waste collection. Is this because the councils are so badly funded that they can’t afford to pay the going rate, or is it that the staff were EU workers with HGV qualifications who have decided that they don’t want to remain in the UK?
With respect to your points about food shortages – you may find this article (by me) of interest:
http://www.progressivepulse.org/brexit/fresh-goods-and-the-uk
The UK is heavily dependent on other EU countries for food supplies – there is a good possibility that these will be disrupted. It will be interesting to see what happens if/when they are. Explosion of discontent – or slow burn unhappines and discontent as the sunlit uplands and unicorns fail to emerge. I suspect slow burn discontent – but doubtless UK serfs, following orders from neo-con news-rags will continue to vote for the clueless/brainless tories.
Your linked piece in turn links to another, https://www.theneweuropean.co.uk/top-stories/my-brawl-over-brexit-with-prime-minister-theresa-may-1-4807899 , which includes this prescient paragraph:
‘I reminded her that Donald Tusk, President of the EU Council, said there would be either “hard Brexit or no Brexit” and I was inclined to agree. Mrs May’s response: “I am sure I have more experience in negotiating in Europe than you do!” Mine: “I don’t think arrogance is helpful.”’
And another piece I was reading this morning about Mrs May and her character (https://www.lrb.co.uk/v39/n06/david-runciman/do-your-homework) indicates that she will work to ‘any Brexit’ (no matter how undesirable or costly), and regard it as successful, rather than change to what she sees as the failure of ‘no Brexit’.
Shades of Bashar al-Assad’s solution to the Syrian immigraton crisis!
The LRB bio is hugely telling and her previous actions describe her thinking and approach.
She undertook the impossible task of ‘reducing immigration down to the tens of thousands’ and then when she got desperate implemented it in the worst way – Windrush.
She is now undertaking the impossible task of Brexit and I believe will consider no deal a viable option when she gets desperate.
The Newsnight bio was also very telling – Clegg said she showed absolutely no interest in the economy during the coalition, others said she had no understanding of business – both now very evident.
https://www.youtube.com/watch?v=dOiFSAb-z9A
I really find it amusing that some people honestly believe leaving any arrangements are like walking out of a pub door and letting it slam behind them and all will be well.
Of course many who want to remain would like to portray leavers of being idiots and focussing on immigration. There also seems to be this idea that whilst we may be happy to concede things to our advantage to make the process easier, travel delays, border controls tax reportings etc other countries and businesses for some reason wouldn’t want to make things easier for themselves and would also work towards making the changes work well and simply. It’s a completely illogical conclusion that only one side would want to look for best ways of getting round the many various issues that might manifest themselves over the early days of leaving.
But we are leaving and this is something that we have known and the EU have known for two years and in todays technological age two years is plenty of time to identify areas of concern and analyse and produce solutions.
Unfortunately too many politicians are more concerned with arguing about a new deal than sorting out the leaving process, the EU blindly hoping that miraculously the Brits will change their minds and many British Politicians hoping that the EU will stop playing politics and posturing trying to avoid other members following and instead focus on trying to find a deal that works fairly for both sides. We are leaving because the majority of the voters feel the EU is not the advantage for us that they feel it is. Of course there will be problems but a more honest and practical approach and acceptance that we are leaving next year should have seen the bulk of the issues addressed already and though maybe a few topsy turvy months of adjustment might follow the reality would be that we would find ourselves doing exactly what we are doing now with the rest of the world which works fine. Sure there will be some strings to cut, some rules to change and the majority of the people accept that, it seems that some find it hard to accept that they are happy to have a few problems over a few months to regain that control
barry says:
” We are leaving because the majority of the voters feel the EU is not the advantage for us that they feel it is. ”
Sure we are, Barry. If two out of five is a majority.
What should irk everyone of clear thinking, whichever side of Brexit that you sit on, is that May has effectiely ignored one side of a close vote.
A true states(wo)man would have said, okay I recognise the vote to leave, but it was a close vote and so for unity of the country this respresents only a small change in our relationship with the EU. Compromise required on both sides.
Unfortunately she doesn’t see the world through those eyes – merely task driven.
It seems as though the final outcome will only serve to leave everyone unhappy when it unravels.
I notice a story today that the Dutch have already employed 1000 new customs staff in expectation of a hard Brexit.
At least someone’s preparing – I don’t see signs of any preparations here, and I live near a major port (Portsmouth).
agree with all that – its fortunate in some ways that we have such a large services sector which shouldn’t be affected
I think that is hopeful
Cash flows between sectors
With services 80% of our exports? I assume you are being ironic?
Chilling. I believe that is all correct in what you have said. You know of course that the Brexiter’s lack of any planning is ‘the plan’? They may think that the hidden hand of the free market will allocate the most efficient resources etc etc. But I have doubts that anyone really thinks that is the case in the modern world in this day and age.
As others have said earlier in your posts (and I have also concluded this some time back), there is most probably a desire to let chaos reign to enable those in control to ‘reset’ society to something like fascism. I wish some historians could provide us with a likely course of events as I am sure this is not the first time an experiment in social engineering has happened.
Icing on the cake….
Fixed number of trains and boats to get stuck in/on….say 200 tops.
Fixed number of truck licences…say 200 tops…
And a lorra , lorra 3rd country import export paperwork that no one has used in years.
Grayling will find it “inconceivable” anything could go wrong.
I have no idea what you are arguing
Apologies, I was typing on my phone and the next bit got lost… The point I was trying to make was if there was a road between say Hull and Zeebrugge and you turned up in your artic at Zeebrugge with the incorrect 3rd country import/export documentation or no valid operator’s licence (highly likely because this will be new to most people) , you would be turned around, then drive back to Hull and pass through Chris Grayling’s “legs akimbo” UK customs solution. No real problem except for the operator business. However with a ferry, you would need to rebook and wait. It would not take long for the port to jam up due to rejected artic loads and the next ferries can’t unload because the port is full, so you end up with a ferry queue in the channel. Soon you run out of ferries and the whole thing gridlocks. And just imagine what would happen to rejected truck loads of bonded goods and live animals for export that suddenly have to be “repatriated.”
“just imagine what would happen to rejected truck loads of bonded goods and live animals for export that suddenly have to be “repatriated.”
They and all the other gridlocked containers would be sitting targets. This is unlikely to go unnoticed by the criminal element, which might have grown rather large by then as a consequence of food and other necessity shortages. If you have to break the law to eat, people are going to break the law, that’s not rocket science. That in turn will have a very negative effect on the viability of importing and exporting, indeed, perhaps on transporting edibles at all.
I suspect many businesses will be long gone by then through sheer necessity. They can’t plan for the future here so perforce they have to go elsewhere. The shock to the economy will already be being strongly felt by the time April rolls around.
The vast majority of business is domestically owned
Agree very much with this nightmare scenario.
And as we import more than half our food (almost a third from the EU) I think it highly likely that general food distribution will also break down https://www.independent.co.uk/news/uk/politics/brexit-latest-food-supplies-shortage-warning-policy-failure-supermarkets-imports-eu-a7844751.html.
You only have to remember how long and numerous empty shelves were in supermarkets over the winter when prolonged cold weather caused their distribution systems to fall over – to see how fragile they are.
Once we’re short of food Brexit Britain won’t remain on an even keel for long.
Spot on Peter
Buy some tons and a lot of pasta
Tons? Do you mean tins? I’m already planning to increment the weekly shop to accumulate stuff and a trip to France next month will test the springs on the campervan.
Oops
It’s a lot more than half our food Peter. When you consider all the inputs into food production, transport, farm machinery, fertilisers, storage, food processing, workers etc, and look at how much of the elements of those things or people depend on foreign then you can pretty well say we are 90+% dependent. Even 10% of the electricity in round numbers used to power milking machinery comes from France and Holland. When the tariffs go up on those electrons crossing the channel then we are well and truly and neoliberally shafted.
There used to be a sit-com set in the East of England which featured a mad older man saying the phrase ‘We are all doomed’, but its name escapes me. It’s appropriate for now imv.
It was ‘Dad’s Army,’ Jang, and the elderly man was Corporal Fraser, a stereotypical Scotsman. The British specialise in stereotyping, especially in south-east England.
But then, you see, although I’m British, I count myself as Welsh!
Peter May says:
“You only have to remember how long and numerous empty shelves were in supermarkets over the winter when prolonged cold weather caused their distribution systems to fall over — to see how fragile they are.”
Some mythology here, Peter. Sure there were some cases of supply line difficulties, however my own local Lidl which looked as if it had experienced the passage of a plague of locusts reported no such supply difficulties. Shortages were entirely down to hoarding and panic buying. Much of the perishable goods will almost certainly have been wasted.
If there are supply problems post Brexit the effect will be magnified by greed and stupidity. The effect of course is exactly the same. Empty shelves.
Watching supposedly normal people buying loaf upon loaf of bread and litres and litres of milk simply because tescos shuts for one day at Easter would give me no optimism come dawn on Brexit Britain.
I read months and months ago some comments on a web site by someone in the civil service saying that a govt contract for ration books had been put out. Sadly makes sense..
Thank you for that cheering prediction of snowballing economic chaos with no reprieve.
I do not doubt you have the ‘no deal’ scenario exactly right. Everyone needs to see this trailer before they buy the film – and demand a new referendum, with the novelty of an honest prospectus and no illegal campaigning.
Politicians will find the road of least resistance today becomes tomorrow’s road to hell, regardless of Leave or Remain constituencies. The millions of young whose future they betray – whether for direct personal gain or a tranquil political life – will never forgive them for acting so emphatically against the best interest of the nation and its people.
Jon Woods says:
” The millions of young whose future they betray — whether for direct personal gain or a tranquil political life — will never forgive them for acting so emphatically against the best interest of the nation and its people.”
I wish I thought you were right about that, Jon, but memories are short and whose fault is it anyway ? Who exactly is the ‘they’ that has perpetrated this betrayal ? Politicians, media and historians will identify some scapegoats, but there are no innocents in a democracy. (Except those too young to vote)
Who will today’s young blame for the anticipated debacle if/when it materialises ? I suggest they will blame whomsoever they are told to blame by the very people and organisations who created the havoc, but who control the narrative.
Following the Falklands conflict the blessed PM Thatcher noted the generous voluntary contribution of about £5 millions from Jersey towards reparations in the Islands and she embarked upon a plan to induce all the Crown Dependencies to contribute on a regular basis for national defence, consular representation abroad, adult education, health and such like. The plan was dropped but some charges were introduced and still remain today.
It echoed the Imperial Contribution discussions following the 1914-18 war when financial contributions were sought and obtained from Jersey and other places – not very willingly – in order to avoid a constitutional crisis.
I wonder if anybody has looked at the Crown Dependencies, Gibraltar and the BOTs making a financial contribution towards the costs of post BREXIT negotiations and whatever solutions might be arrived at?
It is not quite central to the tax topics you raise here but there is clearly a relationship which will no doubt have to be addressed soon if these small places continue to fly the British flag. The calls for public registers of beneficial ownership in the small places might also be seen as part of the same process of harmonisation but of course does not stimulate much discussion among the UK public.
Any thoughts?
An amusing idea
I am sure it will not happen
Richard, You’re ignoring the opportunities that all this will present. JRM, BoJo and others know exactly what they are and are preparing to seize them with both hands, unfortunately for the rest of us.
If we transformed into a republic and started growing bananas, there’d be a perfectly good compound adjective to describe what they will turn our country into.
“April is the cruellest month; breeding lilacs out of the dead land…..” According to TS Eliot
“Farmers rear unkindly May…. ” According to Flanders and Swan.
Your doom-laden conclusions have just been amplified by Boris’s resignation speech, which received a warm welcome from a considerable number of ultras-Brexiters. I spotted at least two of the Scottish Tories amongst that group and, given the number who previously signed up to ERG letters, I’m pretty sure there would have been at least four in the Boris camp. The other Scottish Tories are signed up to the Chequers plan, presumably as modified due to the ERG amendments.
I can only apologise for the Scottish Tory contingent, most of whom will lose their seats at a future election according to a very recent poll. The “leader” of the Scottish Tories should, if the Scottish media could find her, be questioned on this. Her most recent stated view on Brexit supported the original Chequers plan, and she says she hates Boris, so she *should be* chastising her MPs in private, if not in public.
Addendum: Robert Peston has just posted this – Theresa May says 70 “technical notices” for businesses and households will be published in Aug and Sept setting out how we can all prepare for a no-deal Brexit (should that be what happens).
How much food and other supplies will I need? Will one of her “technical notices” advise me?
” Theresa May says 70 “technical notices” ….”
How technically difficult can it be; putting on a tin hat ?
Mind you this is notices to people daft enough to vote for her to be leader of a party of dipsticks and headbangers so perhaps detailed instructions will be appropriate.
I hope they come with illustrations. 🙂
Maybe May is hoping that they will persuade people that anything is better than a Hard//No Deal/ Clean/Cliff Edge Brexit. Even her undeliverable and unacceptable to the other 27 countries Chequers plot.
Im desperately scraping the barrel here. Maybe it is time to stock up on pasta and tinned toms as suggested. Plus paraffin for the stove. Perhaps we’ll get Dig for Victory posters well.
On top of the traffic jams, VAT will be interesting too. For goods imported from the EU, at present you only “pay” the VAT (through self-charging) at the same time as you recover the input VAT, in your regular monthly/quarterly VAT return = no cash flow impact.
Not sure how many businesses will be happy paying the VAT at import, and not being able to recover it until their next VAT return.
That’s assuming the exporting country doesn’t require their companies to charge their own rate of VAT on goods being exported outside the EU – pretty common practice – in which case there’ll be no ability to recover ANY of the input VAT. (Can’t see the UK refunding it, somehow.) Another 19% cost on all those spare parts from Germany…
I mentioned this as part of the cash flow impact
In terms of border controls, as the UK is not in Schengen it requires anyone (EU citizens or not) to show their passports to enter. The efficiency of the process (i.e. biometrics) tends to improve any issues.
It’s worth noting that entry to the USA is really time consuming, requires either a Visa or ESTA, fingerprints taken at entry etc, etc. Doesn’t stop people going though.
But vast numbers of EU entrants will now be subject to more checks
And proportionately vastly more people travel in the U.K. than US
J A Rank says:
“It’s worth noting that entry to the USA is really time consuming, requires either a Visa or ESTA, fingerprints taken at entry etc, etc. Doesn’t stop people going though.”
Perhaps not. But the aggressive attitude of border guards put off the only people I know who used to travel regularly to the US. They no longer go there.
I have heard that HMRC are planning to recruit around 5000 extra staff because of Brexit and have already got 1500 of them, but quite what they will be doing is unclear – presumably not based at ports or airports, possibly inland clearance depots, or at the Salford Customs declarations processing centre ?
Thank you I have been asking for an answer to this simple question for a few weeks. It makes sense what you write. I will stock up I read that a Mr Bertrand had been told that the British had been told to stockpile food (Guardian yesterday). The Government is to issue papers next month on the no deal Brexit. It is coming. Is there some irony that it is possible that the border in Ireland will be free flowing.
Paradoxically you don’t have to be that smart to realise the Brexit mess is substantially the consequence of a predominantly under-educated population of voters and politicians in matters economic and monetary. Even the Labour Party has swallowed the Neoliberal lie sovereign governments can’t create money in its own right despite the Soviet Union closing down all private banks and its government creating the medium of exchange from nothing for seventy years!
https://en.wikipedia.org/wiki/Gosbank
https://labourlist.org/2016/03/austerity-is-a-political-choice-full-text-of-john-mcdonnells-speech/
As Richard rightly says when cash flows start to dry up threatening businesses survival the politicians aren’t going to help much because of their monetary illiteracy! In fact they’ve believed in the need for balancing the governments books like a household now for 70 years why are they going to change?
They might say they believe books need balancing a la households but their behaviours suggest otherwise. Some individuals make no secret of knowing the reality, the Vulcan having publicly declared it on his blog, for example, and that was discussed on here. Their faux illiteracy is becoming harder to maintain anyway in the face of sources like the BofE (and other central banks) making public statements and offering explanations of the matter of money creation. We have to keep chipping away…
…and for 70 years we’ve known (but chosen to ignore) that it’s nonsense. “In the 1940s, the New York Federal Reserve Bank was headed by a guy named Beardsley Ruml. He wrote this really important piece in 1946 called “Taxes for Revenue are Obsolete’” What’s he saying? I don’t know that I need to read the whole thing, but he says basically the need for the government to raise taxes in order to remain solvent and run its affairs is completely yesterday. We don’t do that anymore. Why? Because we have a central bank and because we went off the gold standard.” Stephanie Kelton in https://thenextsystem.org/learn/stories/money-matters-why-monetary-theory-and-policy-critical-terrain-left
Well worth reading
He was not 100% right
But it is worth the effort
Well, you could always sign this and spread it round your networks.
https://petition.parliament.uk/petitions/223729
All petitions submitted via that system are advisory and carry literally ZERO authority or weight
So a bit like the EU Referendum then?
Worth a quick glance at the EC web-site on Brexit and preparedness
https://ec.europa.eu/info/brexit_en
They are getting on with it and preparing for the worst. Incurring substantial costs as they do so, imposed on them by the UK. Compare and contrast with the degree of preparation you think the UK government has made
I’ve read your forecast above a number of times. I find it uncomfortably compelling because it is based on your knowledge of how the economy really works.
Contrast that with what David Davies said in an interview the other night (that of course there would be some issues but that they would only be for short time and that the country would adjust). He just glossed over it.
Our only hope is that Parliament will reject the no deal scenario. It’s just seems like it is taking forever but I can see this going right to the wire – in fact I feel that the wire will be really stretched.
I could be wrong
But in terms of business risk it is where I see the fault line
In his book ‘Tragedy & Challenge’, Tom Brown emphasises the impact of BREXIT on the supply chain for manufacturing.
The thing is that not only are we unclear about what sort of BREXIT we are going to have, the Government does not seem to have done anything in preparation for it or considered in any detail how long this will take.
This is poor governance – purely and simply.
A recommendation for Tragedy and Challenge. A great insight into manufacturing in the UK, the malign influence of Finance and the apathy of government. The utter lack of understanding of anyone in the current government of how business actually works is shown by the pier complete failure to understand the impact of Brexit.
Modern stock systems as “just-in-time”: there is no redundancy; call it ‘conservation-of-working-capital’; or how business actually creates ‘efficiency’ in the modern world (because they thought of every possibel business risk and uncertainty, but never thought of Brexit – as a speculative risk rationally too far-fetched to be credible). Therefore it seems logical to deduce that following Brexit, and in the absence of the time or resources allocated by government to build in redundancy to the British distribution system, the whole system will simply fall over.
Why does the government do nothing about this (negligible investment for ‘no deal’)? The Conservatives cannot credibly plead ignorance; so it must be deliberate …. …. ….
A few months ago I wrote what I thought Brexit would broadly look like, and that was when I thought we would cobble together some kind of naff deal, albeit a deal.
In summary a long slow decline of 20+ years:
https://medium.com/@xciv/if-youre-young-this-is-what-brexit-means-250e703a29d
Now things look rather more bleak I started thinking about what a no deal, deal, would look like – essentially it will be realised that a no deal is happening and the EU will work out the terms of the no deal. I believe this is being planned for – “parachute” is the phrase that I read, presumably this means the UK bailing out.. with a soft landing.
I speculated that they will work out something to keep some flights moving (because EU nationals will want to get home) and that some basic food essentials can still flow and essential medicines.
I theorised that the EU would not be that vindictive to do otherwise and then someone replied ‘Greece’ and now it has me wondering..
But essentially in summary.. consumerism as we know it will end I think. Everything will be on constraint, both in lead times, quantity and variation. Planes flying, but to where and how often. Food, what will be available and in what quantities. All manner of other goods following a similar pattern. Some products may not even any longer make it to the UK, if companies decide we are too much hassle.
We can all see how this will lead to sky rocketing prices of everything.. and probably black markets I guess.
PM today said that in August and September 70 technical notices will be issued for people and business to prepare for no deal. Gulp.
To not prepare is to prepare for failure although I understand from a colleague who has a friend who works at HMRC that they too have been making some sort of provision for change or transition (but you wouldn’t know it would you?).
All May has to do is stop it like Nicholas Soames has suggested and start again. I’ve never been a fan of Soames but he speaks sense.
But no matter what happens, the anti-Europe brigade seems in the best position to make hay out of the issue. They will blame everything (cancelled holidays, food shortages and traffic jams) on the ‘unreasonable EU’.
The ‘canary in the coalmine’ is farming: the riskiest business of all, even in a good year.
Farmers are facing all of the Brexit ‘dividends’ already; and this year’s near-drought leaves them facing Brexit Day with no reserves.
The malign incompetence of DEFRA is already in play: think of it as a foretaste of the ‘support’ on offer to businesses.
Among other inputs at risk from currency fluctuations and border inspection delays, British farmers import all their seed from the EU.
Nevertheless, I would urge caution in predicting crises: on the one hand, people and businesses are more resourceful and resilient than we think; on the other, it’s always something we didn’t think about – money markets, retail credit insurance – that turns a crisis into a crunch.
There is something, somewhere we’re not looking at and planning for.
Farming’s probably the best place to observe and model the coming crunch – not least because ‘their’ branch of government is so much worse than merely inept – but there are many, many points of failure in a modern economy that we don’t know about.
I am not convinced that the crisis will hold off until April. Faced with uncertainty, businesses will react sooner by tightening credit, raising delivery prices, and ensuring that their lorries and people are not stuck on the wrong side of the channel. Some MPs are already calling for the State of Emergency to be declared if there is still uncertainty in February, and personally, I will be starting my panic buying before the year is out!
I know little of theoretical economics (though thanks to you Richard, I am learning!), but I often find that my emotionally-led analysis of the effects of Brexit correspond to your more fact-based one! In some ways, I feel reassured thati’m not just over-reacting, in other ways, it is terrifying to think my gut reaction (from day one) maybe right.
In any case, thanks for your precious moral support!
This morning’s news item over the issue of massive increase in demand for International Driving Permits, remind me of the British Army’s first two crises at the outbreak of WW1 – firstly the Chief Recruiting Officer needing police assistance to get through the crowd of recruits into his office, and then running out of attestation forms… both easily solved unlike those which followed.
[…] on the Department of Transport is standard holiday reading. But in the light of my comments on the potential for traffic issues to create crippling cash flow issues for UK business this one could not pass me by, and is out […]
FT: UK Treasury to relax border taxes in ‘no-deal’ Brexit
The Treasury will instruct its officials to relax efforts to collect border taxes if there is a ‘no deal’ Brexit in a bid to keep supermarkets stocked and goods moving to factories, a junior Treasury minister told Parliament on Thursday….
Don’t panic! Keep calm and carry on Brexiting!
Honestly though I think we’ll be fine. Britain has faced far worse and pulled through. We should have a little faith in our countrymen, stop bemoaning their decision to leave and start embracing the opportunities that will arise AS WELL as keeping an eye on the inevitable crises that will occur in the process.
The left have proven woefully inadequate in providing a progressive vision for Brexit. Richard, perhaps you could write a piece on what the UK government coukd and should do following a no deal Brexit? If there isn’t a progressive plan on paper then how is there going to be even the chance of a progressive plan being put into action?
I am sketching it
Richard,
Good stuff, I thought you probably would be working on a progressive post -Brexit plan – you’re one of our fellow countrymen we can have some faith in. I’m sure there are many more out there who will step up when the time comes.
We shouldn’t let ourselves be disheartened by the reprobates in Westminster currently filling the airwaves with their BS. There are 65 million of us Britons and we’re capable of a great deal more good than we realise.
I neither intend to panic, nor do I intend to embrace Brexit. Your rallying call doesn’t work; actually, that is not quite true. I must ask you to forgive me, but it reads much better as an opening sketch for a ‘Dad’s Army’ episode.
I am faced with pure farce, and you made me laugh – but only cynically.
John,
Laugh cynically and imagine me to be some Brexiteer fool if it helps but know this: if we do Brexit then next April there’ll be no more Remainers nor Brexiteers. We’ll all just be Britons, most of us in the same boat and all with a choice: look on the bright side and do what we can to ensure we pull together and get through whatever comes with our dignity and nation in tact; or fracture into various angry, wailing and useless cliques and thus ensure the absolute worst of all possible outcomes is achieved.
I have faith the vast majority of us will choose the former route and thus I’m confident things will turn out alright in the end. (that is till climate change kills us all of course 😉 )