Saturday 7 March 2020

Brexit: the power of the empty shelf

Yesterday on social and mainstream media there were pictures and reports of panic buying. Our local Tesco supermarket had no eggs and no paracetamol, very little pasta and a lot of empty shelf space that you don't normally see. Government might want to note that civilization is only ever four meals from anarchy and reflect on what things might be like in mid January 2021, even we exit with a deal. It's amazing what damage a tiny bit of grit in a bearing can do.

The mantra that has sustained Brexiteers for the last four years is that we buy more from them than they do from us. The problem is that this includes inter alia 30% of our food.

I begin with this thought because of a Twitter thread by Peter Foster, the 14th tweet being about just that; "how inter-dependent we really are, how fragile supply chains can be; how the economic ecosystem that has grown up under our feet these last 30 years doesn't exist automatically".

Foster notes a new realism and more transparency on the UK side about the coming difficulties on LPF, fishing and governance. He even concedes the UK government's message about the EU being unfair and unreasonable may be getting through, but as an EU negotiator points out, trade talks are not about fairness, they are a negotiation. And between very unequal partners.

Let us be honest even if this is something alien to Brexit Johnson.  If we actually did leave on WTO terms in December can anyone imagine the EU coming running to us soon afterwards begging to sign the deal we have been demanding?  Don't hold your breath for that.  This government would be swept away within days and Johnson replaced by someone who would be forced to go to Brussels and sue for peace.  If the PM doesn't realise this now he will eventually.  People cannot eat bluster.

David Henig tweets in similar vein. Both men mention the Achilles heel on our side, the fragile grasp of detail and the fact that the government does not have the support of business which is increasingly fed up with being told to accept a deal that they know will be damaging to their industries.  They know also that they will be blamed for the delays, shortages and factory closures when it all goes wrong. 

We are also excluding ourselves from a lot of EU programmes that are beneficial - the European Arrest Warrant, the pandemic Early Warning System and now the European Aviation Safety Agency as confirmed by Grant Shapps. This against the clear advice of industry and the CAA, who will now take responsibility for UK aviation safety although they don't want it. All this is on the grounds of a visceral ideological opposition to the slightest link with the ECJ. It is neither rational or sustainable.

In the long term, assuming we get a 'skinny deal', it is not difficult to see new governments coming in and over time slowly negotiating better access to these schemes or even a closer trading relationship to reduce the mountain of red tape. We will then be close to coming full circle and rejoining the EU.

The National Audit Office published a report last week on the costs of Brexit so far. The press release begins:

"Today’s report by the National Audit Office (NAO) examines how much government departments have spent preparing for the UK’s exit from the EU and what the money was spent on. It finds that by 31 January 2020, departments had spent at least £4.4 billion, while £6.3 billion was made available for EU Exit."

This is directly accountable costs to the public purse by government departments. It does not include local government or private sector expenditure on preparations or the £billions lost to the Treasury because of a shrinking economy. Bloomberg in January estimated the economy is £130 billion smaller than it otherwise would have been - so far.

With Covid-19 cases growing daily the government's future plans to boost the economy and level up the nation, always at risk from Brexit anyway, are now under real threat.