When the Brexit vote came up on 23 June, 2016, we went to bed that night thinking this wasn’t a big deal. Who in their right mind would vote to leave the European Union, the largest, richest and most frictionless single economy in the world?
We awoke to the answer on 24 June 2016: 51.9 percent of the people in the United Kingdom, or more than 17 million voters.
In the runup to the election, United Kingdom Independent Party leader Nigel Farage (who has a German wife and several French mistresses), Boris Johnson – later (briefly) foreign secretary – and others on the Far Right had convinced the British people the EU was the bête noire, responsible for all their troubles.
Leaving the EU would mean an extra 350 million pounds each week for the National Health Service; the UK would get a Brexit dividend and would soon be able to cut taxes with the windfall from brilliant new trade treaties around the globe.
In the intervening two years, what was billed as “the easiest negotiations in human history” have gone nowhere as Prime Minister Theresa May’s government discovered what those Remoaners suspected: divorces are bitter to the end.
As we mover ever closer to 29 March 2019, the likelihood of a “hard” Brexit increases, with the UK leaving the EU with no trade, transportation or freedom of movement agreements whatsoever. Which will have ramifications for expats across Europe and beyond.
So we’ve started a running update of Brexit developments:
• On 20 September, European Union leaders including French President Emmanuel Macron told Prime Minister Theresa May her Chequers Plan is unworkable, increasing dramatically the chances of a no-deal Brexit. Or as CNN phrased it in their headline, “Brexit was sold by ‘liars’ and Britain’s exit plan is unworkable, UK told.” The remarks came during a Brexit Summit in Salzburg, Austria.
• This is THE most brilliant and sardonic Brexit post we’ve read, and oddly, it’s from DW, not a British website.
“Brexit — #Brexcrement horrors and howlers” by Rob Mudge condenses all the hilarity of Brexit into a five-minute read of hypocrisy, flipflops and outright lies.
Here’s the funniest bit:
Not to be outdone, Boris “I-know-how-divorces-work” Johnson, the former foreign secretary, came up with a completely new business strategy called “f**k business.” He outlined his cunning plan when asked about concerns raised by Airbus and BMW over the threat to jobs and investment.
• Bank of England Gov. Mark Carney stated a no-deal Brexit could lead to a housing crash in Britain and other financial issues comparable to that of the 2008 financial collapse. The BOE carries out “stress tests” to check whether the banking system can withstand extreme financial shocks.
The most recent from November 2017 predicted a 33-percent fall in house prices could occur in a worst-case scenario, according to the BBC.
Carney’s worst-case scenario was that house prices could fall as much as 35 percent over three years, a source told the BBC.
• On Sunday, 9 September, The Times of London published details of a leaked report from the National Police Co-ordination Centre. The report warns that in the event of a no-deal Brexit, the military might have to be deployed to back up police to quell civil unrest after food and other necessities start disappearing from British shelves. The NPCC report warns that traffic jams at ports could lead to “unprecedented and overwhelming” disruption to the road network.
• Speaking of goods disappearing, the Financial Times is reported Sunday that British businesses would have to stock 40 billion pounds worth of imports to preserve inventories in case of a no-deal Brexit. That increase in business would lead to a spike in the economy, followed by an equal and opposite reaction – a dip as business activity post-Brexit decreased, according to the Centre for Economic and Business Research.
The FT quoted Douglas McWilliams, CEBR founder, as saying, “This makes a post-Brexit mini-recession almost inevitable.”
• You knew this was coming … a warning Brexit would deny Ed Sheeran’s global fan base access to his new music. Wait, this is serious. The New Music Express, or NME as it’s now called, reports the British Phonographic Industry trade group is warning a no-deal Brexit could be catastrophic for Britain’s music industry, which is huge.
Who knew one out of eight albums sold globally in 2017 was by a UK-based artist!
• On 6 September, several British media outlets including Sky News revealed the existence of Operation Yellowhammer, the May government’s planning for a worst-case, no-deal Brexit scenario. That plan includes messaging to reassure financial markets to keep them from collapsing.
The plan also calls for instituting budget austerity, with taxpayers funding emergency measures such as stockpiling pharmaceuticals and other essentials.
Operation Yellowhammer is the work of the Civil Contingencies Secretariat, designed to plan for emergencies and disasters.
• On 23 August, Brexit Secretary Dominic Raab sent out 24 technical notes he called “practical and proportionate advice” in case the UK leaves the EU without a deal. Raab’s release of the documents was meant to demonstrate to the British public that adults are in charge, with plans to ameliorate the worst effects of a no-deal Brexit.
Why, “the vast majority” of consumers won’t even notice any impact, Raab said, apparently referring to Brits who don’t fly, eat food, work for a living or make credit card purchases.
“People and businesses should not be alarmed by no-deal planning and preparation, nor read into it any pessimism. Instead, they should be reassured that we are taking a responsible approach, ensuring the UK’s exit can be as smooth as possible in all scenarios.”
• Unfortunately for Raab, the very same day, May’s Chancellor of the Exchequer Phillip Hammond stated in a letter to Tory MP Nicky Morgan, chairwoman of the Common’s Treasury Committee, that a no-deal Brexit will mean a 7.7 percent decrease in the UK’s GDP over the next 15 years.
To put that in perspective, the real GDP contracted by 4.2 percent between late 2007 and mid-2009 during the U.S.’s worst economic downturn since the Great Depression.
From Hammond’s letter:
Under a no deal/WTO scenario chemicals, food and drink, clothing, manufacturing, cars, and retail were estimated to be the sectors most affected negatively in the long-run, with the largest negative impacts felt in the North East and Northern Ireland.
Bottom line: Government borrowing is projected to increase by 80 billion pounds per year by 2033 to cover the budget shortfall in order to simply maintain the status quo.
Just in case you’re not depressed yet, here are a few more details from Raab’s soothing words to the British public concerning a no-deal Brexit as reported by the BBC:
• UK citizens living in the EU could lose access to payments and pensions from UK banks unless the EU passes its own new regulations.
• The cost of credit card payments between the UK and EU will “likely increase” and won’t be covered by a ban on surcharges. Credit card users could be hit with a new “Brexit tax” – about 166 million pounds.
• Businesses trading with the EU should start planning for new customs checks, and – by the way – might want to invest in new compliance software.
• The UK’s organic food producers could face new hurdles to exporting to the EU.
• Pharmaceutical companies have been told to stockpile an extra six weeks’ worth of medicine to ensure a “seamless” supply.
Kind of lost in all this good news is that a no-deal Brexit has rekindled talk of Scottish independence.
Scottish National Party leader Nicol Sturgeon tweeted:
That a ‘no deal’ Brexit would be an unmitigated disaster – and the fact that UK govt is even talking about it – is evidence of their abject failure. That they once had the nerve to tell us that independence threatened our place in Europe adds insult to injury. Scotland deserves better.
The essential question is, will the Tories come to their senses before the UK goes over the cliff? Most British and international business leaders have opposed Brexit from the start. And banks and financial giants have already begun the exodus to Amsterdam, Frankfurt and Luxembourg City.
If there is a movement for a revote, it will have to be led by a Tory … and there are few Tories outside David Cameron, Dominic Grieve and Morgan who are willing to say out loud that Brexit could be the biggest mistake the UK has made since the Battle of Yorktown.
The best posts we’ve read on Brixit:
• Think we can rewind to the heady days before Trump and Brexit? Think again. Gary Younge in The Guardian.