The UK government has been forced by Members of Parliament to publish its Brexit risk assumptions code-named Operation Yellowhammer. While the government says that the assumptions are out of date because of subsequent efforts to mitigate Brexit risks, the document paints a picture of uncertainty for businesses and citizens alike if a deal is not agreed between the UK and the European Union (EU).
If the UK ceases to be a member of the EU at the end of October this year, the government says that all rights and reciprocal arrangement with the EU will end. That will mean that the UK reverts to “third country” status, which means that member states may decide not to enter into bilateral agreements with the UK – preferring instead to negotiate via the European Commission.
For business, that means readiness is likely to be lower following October. “The absence of a clear decision on the form of EU Exit (customs union, no deal, etc) does not provide a concrete situation for third parties to prepare for,” says the document.
It continues to say that business readiness will not be uniform. “In general, larger businesses across sectors are more likely to have better developed contingency plans than small and medium-sized businesses,” it says. “Business readiness will be compounded by seasonal effects, impacting on such factors as warehouse availability.”
Disruption of goods
One of the immediate impacts has already been well-flagged in the media – disruption to goods passing in and out of the UK and the EU. The government expects France to impose mandatory checks on UK goods on day one, if there is no deal. It says, “between 50%-85% of HGVs travelling via the short Channel Straits may not be ready for French customs.” The flow of HGVs across the channel could fall to 40%-60% of current levels impacting medical supply chains into the UK and supplies of fresh food.
“The UK growing season will have come to an end and the Agri-food supply chain will be under increased pressure at this time of year, due to preparations for Christmas, which is the busiest time of year for food retailers,” the document says. “Government will not be able to fully anticipate all potential impacts to the agri-food supply chain. There is a risk that panic buying will cause or exacerbate food supply disruption.”
The British Medical Association confirmed to the Guardian newspaper that the scenario set out by Yellowhammer matches its own risk assessment in relation to vital medicine supply shortages among other areas. The British Retail Consortium has also accepted the assessment in relation to fresh food availability.
Michael Gove, the cabinet minister with responsibility for no-deal planning, told the BBC the government had taken “considerable steps” to ensure the safest possible departure after a no-deal Brexit in the six weeks since 2 August, the date which appears on the document. That has included a focus on improving the ability of UK ports to handle the expected restrictions to traffic flows. Ministers have said that the paper is not a prediction of what will happen but accept the some of the scenarios presented are “stark”.