The Brexit zombie apocalypse

A hard Brexit would be as bad as they say.

As every Brit knows, on March 29 2019, 109 days from now, the United Kingdom leaves the European Union. (Unless the remaining 27 member countries stop the clock, a well-used Brussels device). What happens if there is No Deal and the UK crashes out with no agreement in place with Brussels on anything? Inconvenience? A reduction in trade until new and better deals are made with say the USA?

Kent Council Council is responsible for the area leading to Dover docks and the Channel Tunnel. They are Tories but have studied the consequences.

A no-deal Brexit could cause major disruption across Kent, with gridlock on the roads around Dover, rubbish not being collected, children unable to take exams and rubbish piling up on streets [….] The registration service for weddings could also be affected and bodies could pile up in morgues because of traffic gridlock, Kent county council warned in an update on no-deal contingency planning.

So it’s more or less the zombie apocalypse, without weddings too. Their nightmare is that as the trucks (queuing for new customs checks at the ports) pile up on the two access highways, the M2 via Canterbury and the M20 via Maidstone, enterprising truck drivers will take to the side roads until these are jammed solid too. I suppose the council could buy electric bikes, so the plucky morgue staff can infiltrate past the stranded German trucks, in the 1940 spirit of Dad’s Army. That doesn’t help the garbage trucks, the hearses, or the wedding limousines though. Apocalypse it is.

What the council is trying to do with these horror stories is to get Whitehall to do some serious contingency planning for a truck rationing scheme that would cut in well before the vehicles reach Kent. What has Whitehall been doing these last two years? The excuse for general drift has been “we are too busy with Brexit”.

Why should the crash-out be so bad?

Brexiters like Jacob Rees-Mogg blithely claim that the disruption will be a matter of teething troubles, before shiny new and better trade agreements are signed with say the USA, allowing the arrival on British supermarket shelves of the chlorine-washed chicken that shoppers have been clamouring for (not).

A far less rosy picture emerges when you look more closely at Dover on March 30 with no deal. At present, 5,000 trucks cross the Channel to Calais every day in each direction, on Ro-Ro ferries from Dover and shuttle trains through the Channel Tunnel. They supply a good proportion of the food in British shops, the medicine in British pharmacies and hospitals, and parts for British factories. The UK is part of the European single market and there are no tariffs to collect or different product standards to enforce. Customs exist at Dover and Calais to combat the smuggling of illegal goods like ivory, slave prostitutes, or rabid animals, and to enforce phytosanitary checks on food and plants. I suppose they can conduct random checks if bored, but like all customs everywhere they mainly rely on well-rewarded tipoffs.

In a No Deal scenario, trade would default to WTO rules. These are based on the non-discriminatory “most favoured nation” principle, so both the UK and France would have to apply minimum tariffs on everything. These are low for manufactures, so shouldn’t be too disruptive, right?

To run trade on WTO or any other terms, you need trained customs officers and robust software to document the truck contents. The current customs officers at Dover and Calais know nothing about WTO rules. Draft them in from other ports, say Le Havre and Southampton, that do long-distance trade? There aren’t nearly enough of them. The issue is exacerbated by the fact that much trade (say in bananas) is conducted not by WTO rules but under separate EU trade agreements with Japan, Korea, Caribbean banana republics, and so on. Full list here. Experience with these is no help to a customs officer facing a WTO Brexit. However WTO rules apply to the USA, China, and Brazil.

Far more important is the software issue. Value-added taxes are collected and refunded at intra-European borders in a pretty seamless way; taxmen have offloaded the routine paperwork on to business, and both parties can live with this. In theory you can do the same for tariffs, WTO or bespoke. But the volume will be say five times what it needs to be now. A major government IT project is updating the customs software for the greater load. But “major British government IT project” is generally synonymous with “giant IT clusterf*** running years late”, and so it proves.

John Thompson, Permanent Secretary (chief civil servant) to the Customs department, giving evidence to a Parliamentary committee:

To get to an optimal system [in place] takes up to three years… we need to be clear a fully functional, optimal system will not be in place on 1 April 2019.

The plan is to release the new export software system just before March 29. I’m sure this will work well.

Philip Stephens at the FT joins the dots:

Whitehall officials estimate the inevitable post-Brexit imposition at Calais of EU checks and controls would cut traffic — imports to, as well as exports from, Britain — by more than four-fifths. The effect would be to choke off supplies to much of British business and leave stranded in France much of the produce destined for British supermarket shelves. … There will not be enough room for luxuries such as fresh fruit and vegetables.

Brits should be relieved that there are at least plans to bring in medicine by air.

Very fortunately, many Westminster MPs have realized that a “no deal” Brexit would be a historic disaster. The chattering classes expect May to lose the vote on her negotiated soft Brexit, originally scheduled for Tuesday but (stop press since breakfast today) now postponed in the face of impending defeat. The defeat would be at the hands of an opportunistic coalition of hardline Brexiters, hardline Remainers, and Labourites who just want to bring down the government. From now on, all bets are off. May can possibly hang on as a caretaker Prime Minister, but her claim to leadership has vanished.

That leaves two clear options on the table, as stated by Donald Tusk: no deal or no Brexit. There are however supporters of an even softer Brexit – BINO for “Brexit in name only”, based on the Norway model. This has no merits over staying in, except that it formally respects the result of the 2016 referendum. Brussels would have to be persuaded to stop the clock on Article 50 and reopen negotiations on a new basis, and I expect they would insist first on a clear political mandate in the UK for the reset. This dovetails with a growing movement for a second referendum, now that fantastic promises have been replaced by unappealing reality.

The one politician to gain from all this is the maverick Speaker of the House of Commons, the unbeloved but capable John Bercow. When you have three or four serious options that cut across normal party alignments, the choice of amendments to vote on and their sequencing can determine of at least tilt the outcome. Bercow is not a shrinking violet: he successfully blocked May’s plan to grant Donald Trump the exceptional privilege of addressing Parliament in the historic Westminster Hall.

There’s an interesting point of wonkery to finish up with. Paul Krugman – he got his Nobel for work on international trade, so he has real cred on this – disagrees with the dire assessments by the Bank of England on the economic costs of a chaotic Brexit. The Bank puts them at twice Krugman’s estimate.

I’m with the Bank here. Academic economists like Krugman model economic relations tacitly assuming a constant, or at least very slowly changing, institutional framework. Increase a tariff, as Trump has done on Chinese steel, and prices and quantities change in a predictable way – but nothing changes in the dockside procedures. A hard Brexit is a discontinuity, a massive and sudden disruption to a well-established system. It’s less like a standard policy shift than the outbreak of war – or if you like a zombie invasion that nobody knows how to deal with.

In this epistemologically extreme situation, well-founded anecdote is better than reasssuring models with invalid assumptions. The Bank’s chief economist, Andy Haldane, has revived Alfred Marshall’s practice of travelling round the country to talk to and above all listen to businessmen. They have I think been telling Haldane that a no-deal Brexit would be a train wreck, and he has heard them.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

18 thoughts on “The Brexit zombie apocalypse”

  1. The whole thing seems to be playing out like a particularly deadly game of chicken. I’ve been listening to interviews of “no deal” Brexiters explaining why the BOE and economists like Krugman are wrong. I gather that their current thinking is that, if the hard line on Brexit is maintained (as a bargaining position or even as an outright bluff), the EU is certain to give the UK a better deal—probably a really, super duper deal—either because they will realize that the UK is the indispensable nation or because they are more terrified of the zombie apocalypse and, relatedly, “no deal” is no problem even if all hell breaks loose because after a four or five weeks of the zombie apocalypse the EU will have to bail out the Brits, for reasons.

    So, for example, the Kent Council is a bunch of old fuddy-duddies because, after a “no deal” Brexit, yes, there might be a bit of chaos for a few weeks but, eventually, the French are guaranteed to intervene and bail them out by sending a vast army of customs officers to enforce British customs and immigration laws in France. So the huge traffic pileups and associated problems will take place in France, the costs of the manpower to enforce the customs laws will be borne by the French, and migrants (but also polish plumbers and hotel maids) will be kept out of Britain by the French customs service.

    Similarly, something will work itself out on the Irish border. The Irish will come to their senses because nobody wants the zombie apocalypse. The Irish will learn to live with a hard border.

    It’s basically just a rerun of the original “pie in the sky,” promise them anything Brexit campaign. And it appears to be operating on the same assumption that the grownup will eventually have to step up and kill the hard Brexit and then Boris will be prime minister and the other hardline Brexiters will all step up hugely, too. The grownups (a/k/a Labour, the SNP, the rump Libdems, etc) will be gaffed to death. All the while, Boris & Co will bask in the glory of having been “right” that a hard Brexit would’ve avoid the reality that there was never any deal possible which would’ve left the UK anything but significantly diminished politically and far worse off economically.

    1. It sure seems like a rerun of “Hillary’s got a lock on this, so let’s get back to Trump as he bites the head off a bat on live TV!”


  2. “Similarly, something will work itself out on the Irish border. The Irish will come to their senses because nobody wants the zombie apocalypse. The Irish will learn to live with a hard border.”

    I live about 30 miles from that border, and what is seen as sense here is not to re-create the dire conditions of the Troubles. In fairness, May seems more sensitive to the border than the Democratic United Party, who are now demanding that the backstop be dropped completely.

    The “backstop” is the default to a European Customs Union that would come in being should the UK not have agreed a full Free Trade deal b y 2022. It is explicitly designed to prevent a hard border. It would leave NI in the Single Market, with some customs inspections between NI and the rest of the UK.

    The hard Brexiteers (and the DUP) claim this is dividing the Union, though they themselves seem to be rushing to push Scotland out of the Union. Scotland adamantly wants to remain in the EU, and is likely to demand full Independence to pursue that option.

    As James points out, the sensible option (but it is brexit with the small b) is for the UK to remain in the Single Market or Customs Union (or in virtual mechanisms with similar effects), a Norway-style deal. That may be the only option in the end that will command a majority of House of Commons, and (quite likely) a majority in the UK as a whole. But it seems much too sensible for consideration right now.

    1. Correction: “Democratic United Party” should be “Democratic Unionist Party”. The DUP are a Northern Ireland party, who have been propping up May’s Government with their 10 MPs since the election when the Tories lost their majority. The DUP campaigned for Leave, but Northern Ireland voted 56% to 44% for Remain. However, for the DUP, the Union trumps all other issues, and they generally (but not always) stick with the most extreme British or (more accurately) Engliah nationalists, the Brexiteers in this case.

  3. The other day I saw a piece on British agriculture that crowed about the fact that the country is ostensibly 76% self-sufficient. Maybe they can re-open some Marmite factories.

    1. This would be news to the House of Lords which apparently is pretty sure that Britain imports an awful lot of it food and would continue to be reliant on imports even after a hard Brexit, which it concludes would result, in the best case, in significant prices increases for food and conceivably in shortages.

      Apparently, the government’s plan for averting food shortages is basically to continue to act as though it was still part of the EU: “”The Government’s proposed alternative is to allow EU imports through with no, or very few, checks: this raises safety concerns as well as questions over how customs charges would be processed”.

      The whole thing is insane. Basically, a combination of crazy and/or extremely ambitious people are driving the process without regard to the consequences and the whole premise of the May government has been to placate these people and that, if they’re allowed to save face, they will take up the opportunity to essentially maintain the status quo indefinitely through some form of BINO. But so far, all that’s happened is the the hard Brexit people are still promising rainbows and unicorns and Boris the Clown is likely to be the next PM.

      1. Eliminating UK tariffs sounds smart to me. If there are to be shortages, let them occur on the EU side of the border. Food safety does not require customs interference in this day and age.

        1. The first time I read this comment, I laughed, b/c too funny. I mean, the commenter couldn’t be serious, could he? But then I thought: maybe the commenter is serious. In which case, they’re also being misleading. No, food safety (from Richard North, “sanitary and phytosanitary checks” (SPS)) isn’t intrinsically connected to customs. Instead, it is an entire regime of regulations and regulatory inspection that can be carried out far from the border. But those regulations need to be harmonized, regulators themselves need to be licensed, audited, supervised, etc. All of this involves much more than a customs union.

          And (having read Richard North for a number of months) all of this needs to be agreed-upon in detail. Just saying “oh, we’ll let in any truck carrying food” is a sure-fire guarantee of tainted food coming into the UK, people being sickened and dying.

        2. The other thing is the WTO most-favoured nation rule that I mentioned. The UK can’t just drop tariffs on imports from the EU, it would have to do so for all imports. That’s doable in an emergency, but would complicate the future trade deal with the EU, to stop the UK being used as a poste restante to evade EU tariffs. And trade goes two ways. France would have to levy the EU’s WTO tariffs on imports from the UK. The trucks blocking roads in Kent would be queued up behind French customs checks, not British ones.

          They really have not thought this through. Kent County Council is more credible on the problems than 10 Downing Street.

        3. If there are shortages of things like food and medicine, those shortages won’t be in France or in the Republic of Ireland because they are connected to the rest of Europe and to the world. The shortages would be in the UK because that’s who is importing the food and medicine. In theory, there will be significant, perhaps disastrous,consequences to suddenly disconnecting from the rest of the world because of things like obligations under the WTO, etc.

          Alternatively, if the UK simply adopts an open border policy, there’s a really good chance that they’re going to start experiencing a lot of the same problems with the safety of food and medicine that China is suffering from. Even in the best case, the assumption the conservatives are making is that everyone is prepared to break the rules, pay any price, and bear any burden to prevent the zombie apocalypse from tearing apart British society. I don’t think this is the percentage bet.

      2. Sorry, too telegraphic. Being 76% self-sufficient (if true) means that a quarter of your food comes from somewhere else. (And that’s in the best case where you don’t produce for export.) So in the Hard Brexit case, either Britons have to consume 24% less food on average (where the distribution means likely far fewer fruits and vegetables). That would be an Enormously Big Deal. Or, if you just let the free market take its maximal-wisdom course, approximately 24% of Britons have to stop eating until things are sorted out.

  4. I don’t remember such problems as this when the USSR and Communist bloc broke up. Maybe the thing won’t get sorted out until the crisis is upon the parties?

    1. The collapse of the USSR was extremely disruptive. Steel production fell from 163mt in 1989 to 44 mt in 1998. Things weren’t quite so bad in the other communist states, but the transition was still very hairy.

      1. And there was a massive drop in lifespans, as well as fertility . Something you don’t expect to happen in an industrialized country.

  5. Actually, if you read Krugman’s entire analysis (not THAT long) he’s pretty convincing. He agrees with the Bank that the immediate result will be total chaos. The problem he sees is that the Bank is assuming that the chaos will continue for years and years. Krugman realistically contends that any British government will work very very hard to clean up the mess, that by year 2, at least, matters will have stabilized, and that the Bank is being alarmist with a model that assumes basically that nothing ever gets fixed. Krugman isn’t assuming that armies of French customs officials will help Britain out—just that the British government will work hard at the problem. (They had better, or whatever government is in power will be glad if it merely loses power, and isn’t strung up from lampposts.)

    1. I think the fundamental difference between Krugman and BOE is that the bank probably understands that the same problems related to the Conservative and Labour parties that are preventing the Msy government from acting to intelligently address Brexit related issues will very likely prevent the government from doing so in the future, even if the first months or years are disastrous.

      Nothing is going to be fixed for basically the same intractable reasons that British society was unable to prevent the Conservative Party from driving the country over a cliff in the first place.

      1. Not sure how the alleged inadequacies of the Conservative and Labour parties would stop eityher from hiring and training a ton of new British-national customs officials or building large new car parks for lorries.

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