Omnishambles – a situation which is shambolic from every possible angle.
The word was coined in the magnificent political satire show The Thick of It, which parodied the total incompetence of UK politicians, spin doctors and civil servants as they all vied for power and influence (and contained some of the highest quality swearing you’ll ever hear).
Omnishambles – welcome to Brexit
And therein lies the problem. As Theresa May found out to her peril there is no middle ground to be found in this mess. Nevertheless, given the 31 October deadline is fast approaching I thought it time to provide an update as to where we are:
What happens on 31 October?
The default position is still that the UK will leave the EU on 31 October at 23:00 Greenwich Mean Time (GMT).
If no deal is agreed ahead of that deadline the UK immediately exits the customs union and single market with all the accompanying implications.
What are the implications?
Operation Yellowhammer is the name for the government’s contingency plan for potential worst-case scenarios for leaving without a plan. It was released in September after MPs demanded it be made public.
It breaks down the various impacts on:
- Food – overall shortages and increased prices which will disproportionately affect the more vulnerable.
- Healthcare – supply chains will be severely disrupted, and while some medicines can be stockpiled, delays of six months may be expected.
- Energy – likely significant price rises if the UK splits from the EU Single Energy Market.
- Public order – likely increases in public disorder and community tensions, and disruption to information sharing between UK and EU law enforcement.
- Transport – massive interruptions to freight as British companies scramble to ensure their lorries are ready for EU customs. Estimates suggest the clogging of the transport systems could lead to delays of up to two and a half days to cross into France.
- The Irish border – trade between Northern Ireland and the Irish Republic to be severely disrupted with companies moving or folding with significant job losses.
Many politicians and businesses say a no deal Brexit would be devastating for the economy. Others say the risks are well overblown and any short term pain would be worth it to allow the UK the freedom to forge its own path.
What is this ‘backstop’ that everyone is banging on about?
As both Northern Ireland and the Republic of Ireland are still currently members of the EU, goods and services can trade freely between the two countries. After Brexit they will be in different customs regimes which potentially brings in all the checks and balances needed for goods to cross the border.
Both the EU and UK agree that there shouldn’t be any new physical checks or infrastructure at the border given the age-old political sensitivities in Ireland. So various ‘backstop’ options have been proposed including Northern Ireland remaining in the EU customs union (opposed by the DUP – a Northern Irish Union party that props up the British Conservatives), the UK remaining in the EU customs union (opposed by many MPs who think it would be used to trap the UK and stop it making its own trade deals) or an alternative such as getting rid of the backstop altogether and relying on technology and checks away from the border (supported by Boris Johnson but opposed by the EU).
What’s Boris Johnson’s angle?
He’s made no secret of his desire to be PM and you rather feel he would have taken whichever side would have provided the best route to that. But now that he is PM he’s taking the hard-line approach, perhaps to extract a better deal, perhaps to appeal to his ‘hard Brexiteer’ supporter base.
So far in his “do or die” strategy he’s suspended parliament – deemed illegal by the Supreme Court, and called for a general election – blocked by MPs.
What about the opposition?
You’d think it would be easy to take advantage of this mess, but Labour is led by an ardent socialist and long-time Eurosceptic generally considered to be unelectable. The party is riven with divisions with those who think a strong anti-Brexit approach should be adopted versus those who think a neutral stance, subsequently agreed upon at their recent Labour Party Conference, should be the preferred path.
Either way, what with the Conservative’s hard-line approach and Labour’s stumbling through, the Liberal Democrats and Green Parties are hoping for further haemorrhaging of votes from the main parties as happened in the European elections earlier this year.
So what will happen?
While talks continue between the EU and the UK, the chances of agreeing a new deal by 31 October is slim to nil. Even if the EU agrees a deal with Boris Johnson it is highly unlikely a parliament divided between, and within, parties will approve it.
Parliament has recently passed a law instructing the government to request another extension if a deal isn’t reached by mid-October and this seems to be the most likely path now. But how this works when the British prime minister refuses to do so adds even more confusion.
It could be that Boris Johnson refuses to ask for the extension and then resigns, leaving a caretaker government to ask for one. He could then bide his time until the next general election. But the truth is that UK politicians are finding new ways every day to mess this up – truly shambolic from every angle.
Simon Briggs is a Director at Keep Wealth Partners.
Keep Wealth Partners Pty Ltd (AFSL 494858). This information is of a general nature only and may not reflect our views.