On Tuesday, the UK Parliament is slated to vote on whether PM Theresa May’s Brexit deal should survive or die.
All the signs are that politicians in the House of Commons will choose overwhelmingly to stop the agreement May has struck after 18 months of talks with the EU.
And so, in what seems like a desperate last minute play, May’s government (that is whoever remains loyal to her) has issued a dramatic letter of warning to the country warning of the consequences of a ‘no’ vote and the case of the UK crashing out of the EU without a deal.
This is Project Fear 3.0 (to be clear, Project Fear 1.0 was PM Cameron’s 2016 warnings of national security threats, among other things; and Project Fear 2.0 was The Bank of England’s latest economic depression forecast)
The government is telling supermarkets to keep as much stock as possible in warehouses around the country.
“The problem for supermarkets throughout this process is the seasonality of fresh produce,” said Brian Connell, a supply chain consultant at KPMG.
“Some of the stuff they would want to stockpile hasn’t even been sown yet, let alone grown or harvested.”
Retail giants including Tesco Plc, J Sainsbury Plc, Walmart Inc.’s Asda and Wm Morrison Supermarkets Plc — the country’s four biggest grocery chains — are now asking their main suppliers to ramp up their stock over concerns that half their shelves will be empty if there is a hard or no-deal Brexit, according to Joe Clarke, national officer for food, drink and tobacco at the Unite union.
As Bloomberg reports, the request is being made by ministers because in the worst-case scenario, a no-deal Brexit would cut the capacity of the country’s main EU trading route from the French port of Calais to Dover in southeast England to just 13 percent of the current level due to additional border checks.
Six government and industry officials with knowledge of the matter spoke to Bloomberg on condition of anonymity because the contingency plans aren’t public.
Worries over panic buying and loss of access to the EU’s customs union and single market are mounting for grocers, as they predict a 47 percent drop in goods and believe supply chains could dry up within two weeks of a chaotic exit from the bloc, Clarke at Unite said. They are asking their top 20 manufacturers to supply more produce in case this happens, meaning there will be less choice of brands for shoppers.
Even in the best-case no-deal Brexit scenario, officials foresee six weeks of disruption at the borders. The government is briefing organizations affected by cross-border trade on its latest no-deal planning Friday.
Separately, the Department of Health said in a letter Friday it expects up to six months of “significantly reduced access” especially on shorter shipping routes in the event of a no-deal Brexit. It didn’t give specifics on what businesses should do to prepare, though it said “six-week stockpiling activities remain a critical part of our contingency plans.”
Medicines supply contingency plans for a no-deal Brexit scenario
I am writing as part of the Government’s ongoing preparations for a March 2019 ‘no deal’ Brexit scenario and the potential impact on the supply of medicines.
On 23 August 2018, I wrote to all pharmaceutical companies that supply prescription only medicines and pharmacy medicines to the UK from, or via, the European Union or European Economic Area asking them to ensure they have a minimum of six weeks additional supply in the UK, over and above existing business-as-usual buffer stocks, by 29 March 2019.
I am writing to update you on the progress made to date and some updates to the Government planning assumptions, which may now affect you even if you do not supply prescription only or pharmacy medicines from or via the EU/EEA into the UK.
As you will be aware, the Government and the EU have now agreed the basis upon which the UK will leave the EU in March 2019. This represents a significant step towards the UK’s objective of securing an orderly exit from the EU. Nevertheless, as a responsible Government we have to plan for all scenarios.
Update to cross-Government planning assumptions
In August I advised that the cross-Government planning assumption about potential border delays would be subject to revision in light of future developments.
Government departments have been working to design customs and other control arrangements at the UK border in a way which ensures goods can continue to flow into the country, and won’t be delayed by additional controls and checks. On the UK side this work is proceeding well, and we have been clear we will not impose additional controls and checks. However, the UK Government does not have control over the checks which member states impose at the EU border. The European Commission has made it clear that, in the event of a ‘no deal’ scenario, it will impose full third country controls on people and goods entering the EU from the UK. Whether this happens or not is in their hands, not ours.
Although we cannot know exactly what each member state will do with respect to checks on the EU border, the cross-Government planning assumptions have been revised so we can prepare for the potential impacts that the imposition of third country controls by member states could have. These impacts are likely to be felt mostly on the short straits crossings into Dover and Folkestone, where the frequent and closed loop nature of these mean that both exports and imports would be affected.
The revised cross-Government planning assumptions show that there will be significantly reduced access across the short straits, for up to six months.
This is very much a worst-case scenario. In a ‘no deal’ exit from the EU we would, of course, be pressing member states hard to introduce pragmatic arrangements to ensure the continued full flow of goods which would be to their benefit as well as ours. Nevertheless, as a responsible Government, we have a duty to plan for all scenarios. And in areas where we cannot tolerate significant risk to the flow of goods, such as with medicines and medical products, we need to have contingency plans in place for this worst-case planning assumption.
This means that whilst the six-week stockpiling activities remain a critical part of our contingency plans, this now needs to be supplemented with additional actions.
The Government recognises the vital importance of medicines and medical products and is working to ensure that there is sufficient roll-on, roll-off freight capacity to enable these vital products to continue to move freely in to the UK. The Government has also agreed that medicines and medical products will be prioritised on these alternative routes to ensure that the flow of all these products will continue unimpeded after 29 March 2019.
Our data shows that you currently do not manufacture, batch test or release your products in the EU before marketing them in the UK. However, if this has changed I would ask you to contact our Medicines Supply Contingency Planning Programme.
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The timing of the Health Department’s letter risks angering Brexiteers, who will likely see it as an attempt to exert pressure ahead of the vote, and rightfully so, as Health Secretary Matt Hancock told BBC Radio Friday the likely logistical problems were “another reason” to vote for the prime minister’s deal.
This, we suspect, is far from over…
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