Crash & Burn?

As of tomorrow we will be 39 days from crashing out of the EU unless something unexpected happens – the miracle of the two wings of the Conservative Party agreeing with each other (even temporarily). Although I think there is a scant possibility that the hard-line Brexiteers might hold their noses and sign up to Teresa May’s deal I think that’s actually pretty unlikely giving the push from some quarters for a no-deal Brexit as the preferred way to go. Naturally there are a few problems with leaving on a no-deal basis but essentially it boils down to one thing – the absence of any kind of deal. This has all kinds of implications on both sides of the Channel some of which we are aware of, most of which we might appreciate and some of which will bite us – HARD.

I think a big part of the problem is that, because we’ve been an EU member since the mid-1970’s very few people appreciate what it was like before we joined. Now, with a decent transition period we could probably have a reasonably effective system in place before we actually left. Without that transition we change over from one set of rules to another set (of generic rules) when the clock ticks over past midnight. One minute we have a whole set of regulations everyone follows and are fully aware of. One minute later no one is quite sure what to do any more. This is not the recipe for any kind of economic activity – never mind anything approaching normality.

As the probability of a no-deal increased both sides started making detailed contingency plans. As far as I can tell the EU plans appear to be further along and much more competent than our own. Some have even been arguing that trying to reduce the effects of no-deal on the British economy actually reduces both our bargaining power in Europe and reduces the threat hanging over MP’s from both sides from being forced into a compromise with Teresa May (AKA being forced to agree with everything she says). So I’m guessing that any plans will do make – nothing like leaving things to the last minute - will be half-hearted, half-assed and only partially thought through and implemented. So it’s pretty certain that the first couple of weeks – and maybe a month or so – will be a combination of chaos, panic and the military being drafted in to sort the mess out.

One thing that’s pretty much guaranteed is that there will be shortages in the shops. This will be a combination of supply chain breakdown (which everyone pretty much agrees on will happen even if things run reasonably efficiently at the ports of entry - which they won’t) because of the prevailing just-in-time systems used by most businesses. A lot of companies are spending a great deal of time and money stockpiling supplies but at best that will only relieve some of the stresses for a few weeks. But I think what will really cause a problem will be panic buying. I’m predicting that, by about 15th March (if nothing else changes), people will start to realise that a problem is barrelling towards them – fuelled by the media no doubt – and they’ll start emergency stocking up on things. What that will cause is temporary and local shortages of things and once people see empty shelves in supermarkets they’ll go full panic mode and shops will have to start rationing things. We’ve seen it before when heavy snow is predicted or strikes happened in one industry or another but this will be worse. Much worse. 

Sensible people, it seems, are already pre-panic buying and are steadily, slowly, increasing holdings of coffee, baby wipes and cat food. A little extra on the weekly shop stored away under stairs or in the garage. Freezers are filling up (as are petrol tanks), cupboard space is becoming a premium and best before dates are being checked. The sensible people are digging in….. Personally I’m stocking up on books and body fat – just in case the worst happens….