Monday, December 07, 2020

Whither Brexit?

The United Kingdom is less than a month away from leaving the European Union. SF author, Charlie Stross, who is a resident of Scotland, looks at what that's likely to mean

If you've only been hearing about Brexit through the mainstream media (especially British media), you'll find he has a very different take on it. 

 Weird shortages will show up on the British high street almost immediately. Cut flowers, for example, are almost overwhelmingly imported on overnight ferries from nurseries in the Netherlands: expect Interflora to take a huge hit, and many high street florists to shutter, permanently. Those displays of cut flowers near the entrances of supermarkets will be a thing of the past. So will cheap "basics" ranges of canned food: they're already vanishing from supermarket shelves, in a move that is probably intended to prepare consumers for the coming sticker shock as average food prices rise 15-20% in a month.

There will be a near-crisis in Northern Ireland as more than 200 border crossings have to either carry out customs inspections or close. The Good Friday agreement is in jeopardy if free movement across the border goes. More to the point, about half the food wholesalers supplying shops in the North have announced that they're just going to give up that market, unless streamlined arrangements can be made. Some businesses will simply become non-viable: milk, for example, is in some cases currently trucked across the border multiple times between the farm gate and the dairy (as roads wind across the border) and butter or cheese processing involves movement between facilities on different sides of an arbitrary line on a map that requires VAT and duty assessment at each step. But let's ignore Northern Ireland for a bit.

In England, Nissan have already very politely indicated that they will stop producing cars in the UK in event of no deal being reached: their supply chains are integrated across the EU. One example given a year ago was that components of the transmission of a (BMW manufactured) Mini crosses the UK/EU border half a dozen times before it's bolted onto the car, as specialized operations are carried out at facilities in different nations. Brexit seems likely to impose additional manufacturing overheads of 10-20% on the automobile industry. I expect major car plants to begin to close by mid-January. We can also probably say goodbye to continued production of Airbus components in the UK—the exact same logistic headaches apply. That's a £105Bn industry and a £11Bn industry both on the brink of non-viability due to Brexit.


No comments: