We are now living through the bleak predictions made in the Brexit contingency report in 2019, says TJ Coles
Unaffordable food and energy bills, hours-long border queues, medicine shortages; these crises were the predicted – and predictable – consequences of a Brexit championed by successive Conservative governments and the right-wing media.
While Vladimir Putin’s illegal and immoral invasion of Ukraine triggered the EU-wide cost of living crisis, Britain has seen some of the worst inflation in Europe – delivering on the warnings of the so-called ‘project fear’ campaign.
Operation Yellowhammer was the Theresa May Government’s secret contingency plan for the “reasonable worst case” outcome of a ‘no deal’ Brexit – in other words, the worst things that the Government anticipated in the event of failing to reach a Withdrawal Agreement with the EU. After May had been replaced by Boris Johnson, a version of Yellowhammer was leaked to the Sunday Times. The Government was then compelled to release an official version, some of which was redacted.
It was heavily disputed whether Yellowhammer was a ‘base’ scenario for a no-deal Brexit or anticipation of worst outcomes. In either case, its predictions are salient.
Before the no deal deadline, the Johnson administration cobbled together a Withdrawal Agreement, which former Chancellor Philip Hammond alleged had already been offered to May by the EU. The Johnson agreement was similar to no deal in certain respects because it left many loose ends, most notably the question of Northern Ireland and its relationship with the EU.
Moreover, if we compare Britain’s contemporary crises to Yellowhammer, it is clear that we are living the document.
Energy and Inflation
At 9.1%, Eurozone inflation is lower than the UK’s, which stands at 9.9%; among western Europe’s highest. For Britain’s closest economic competitors by GDP, inflation is as follows: France 6.5%, Germany 7.9%, and Italy 8.4%. Using France as an example, economists cite quality jobs, social security, and Government price caps as the main reasons for relative inflation control.
Unlike in France, Britain’s measures to control inflation are likely to fall on the backs of poorer people. As the Institute for Fiscal Studies reports, in relation to the Bank of England’s decision to offset inflation with interest rate hikes: “older people with mortgages and those with lower levels of household income are more likely to be exposed to interest rate rises in the short term”.
But what’s Brexit got to do with it? In June this year, the business journal Bloomberg cited three US financial institutions: Bank of America, Citigroup, and Standard Bank. When it comes to inflation, each bank sees Britain as an “outlier in the developed world because of the economic damage wrought by the decision to cut ties with the European Union”.
Yellowhammer optimistically predicted that “Demand for energy will be met and there will be no disruption to electricity or gas interconnections”. In reality, UK energy infrastructure has proven to be more dependent upon the EU than the Government was willing to reveal.
The Financial Times recently reported that the consultancy firm Baringa estimated that “Hundreds of millions of pounds are being added to UK energy bills because of the failure to implement a trade deal with the EU that would allow efficient movement of power via subsea cables”.
Duncan Sinclair of Baringa says: “A side effect of Brexit is a temporary step backwards in the way electricity flows between us and our neighbours. The system is now less efficient – leading to higher costs – at a time when concerns around rising costs and energy security are paramount.”
This was echoed by Sir Philip Lowe – an executive chair at the World Energy Council and the former director-general for energy at the European Commission – in an interview with Byline Times a year ago. “The EU’s long-term strategy, which the UK was very much in favour of, was to integrate markets as far as possible across Europe,” said Lowe. However, while the EU plans to integrate further, the UK has extracted itself from this policy through Brexit, while an energy agreement was not included in the free trade deal between the UK and the EU.
By EU standards, Britain has been notable for having low food prices. Yet, since Brexit, that has all changed. By July, UK food prices were up 12.6% compared to the previous year – something predicted by Yellowhammer, particularly for poorer people.
A London School of Economics (LSE) study notes that two-thirds of international trade is in intermediate products used domestically, such as vegetable oil and animal feed.
Brexit caused a shortfall in imports from EU member states and, as they readjust to trading with non-EU markets, businesses have been stockpiling, which causes artificial scarcity and thus price rises. Between the end of 2019 and 2021, Brexit-induced EU trade barriers added 6% to food prices. Despite what the Government has otherwise claimed, the LSE report concludes: “COVID-19 is ruled out as a factor”.
Indeed, Yellowhammer even took into account the potential for a health crisis to compound the problems suffered through a hard Brexit – stating that “seasonal flu” and “severe weather” were both potential risks. The implication was that a severe outbreak or even pandemic should have been incorporated into Brexit planning.
Medicine and Border Delays
“The reliance of medicines and medical products’ supply chains on the short straits crossing make them particularly vulnerable to severe extended delays”, said Yellowhammer, referring to Dover-Calais and other key ports.
Leaked data from the Department of Health and Social Care in 2020 listed 209 medical products that had supply problems in the previous year; more than half of which were in short supply for more than three months. Drugs such as hepatitis vaccines and anti-epileptic drugs, faced ‘extended’ problems.
Now, with Brexit supposedly ‘done’ and the pandemic supposedly over, what is the state of UK medicine?
The European Medicines Agency (EMA) said in July that it would be monitoring potential medicine and product shortages caused by supply chain issues. But, as the EMA announced the need to monitor, the UK had already experien
ced shortages. Over the previous six months, more than 700 pharmacists had experienced patients being put in danger by medicine shortages.
In August, Mike Dent of the Pharmaceutical Services Negotiating Committee said: “We are becoming increasingly concerned about medicine supply issues and the very serious impact this is having on both community pharmacy teams and their patients.”
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Hospitals had been advised to stockpile, patients had to search multiple pharmacies for drugs, and doctors expressed concern about using alternatives.
Yellowhammer likewise predicted that “UK citizens travelling to and from the EU may be subject to increased immigration checks at EU border posts”.
Since Brexit, Dover-Calais queues have become notoriously long, affecting hauliers and holiday-makers. Ferry operator, DFDS, recently said: “Calais was affected by ‘the perfect storm’ of summer volumes in combination with post-Brexit border checks, causing six hours of queuing”.
While new Prime Minister Liz Truss was quick to blame France for failing to streamline passport controls, other analyses point the finger at Brexit.
Truss will try to score political points among the Conservative Party’s pro-Brexit voter base by blaming the EU for everything while being obstinate with her European counterparts. This will be sold by the right-wing media to the public as Truss taking a ‘tough stance’.
A common anti-Labour attack line is that the party would take Britain ‘back to the 1970s’, were it to take office. But now it is the Conservative Party that is reviving the age of strikes, power outages, and civil disobedience – all predicted years ago by Yellowhammer.
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