Operation Yellowhammer: No-deal Brexit document leaked

On Sunday, a government report which detailed the impact of a no-deal Brexit was revealed by The Sunday Times.

The leaked report, codenamed Operation Yellowhammer, revealed the predicted consequences of the UK leaving the EU with a no-deal on 31 October.

The report outlines the possible worst-case scenarios of a no-deal Brexit. Michael Gove has responded to say it was an “old document” that only looked at “what the very, very worst situation would be”.

Here are the key points:

Transport and channel ports

• France will impose EU mandatory controls on UK goods on day one of the UK’s exit from the EU. It is predicted that 50-85% of lorries may not be ready for French customs, which could reduce the flow rate of lorries to 40%-60% of current levels within one day.
• It is predicted that the worst disruptions could last three months before flow rates increase again, although disruption could continue much longer.
• In a worst-case scenario, lorries could face a maximum delay of 1½-2½ days before being able to cross the border.

Immigration and border checks

• UK citizens travelling to the EU may be subject to increased immigration checks, leading to passenger delays at St Pancras, Cheriton (Channel tunnel) and Dover.

Drugs and disease

• The supply of medicines and medical supplies to the UK are vulnerable and may be reduced or delayed, although The Department for Health and Social Care is developing a multi-layered approach to mitigate these risks.

Food and water

• Certain types of fresh food will decrease. Critical elements of the food supply chain (such as ingredients, chemicals and packaging) may be in short supply. These two factors will not cause an overall shortage of food in the UK but will reduce availability and increase price.
• Public water services are likely to remain largely unaffected, thanks to actions now being taken by water companies.

Law and order

• Law enforcement data and information-sharing between the UK and the EU will be disrupted.

Financial services

• Some cross-border UK financial services will be disrupted.

Fuel

• Border delays could disrupt fuel supply in local areas.
• Tariffs make UK petrol exports to the EU uncompetitive. Industry had plans to mitigate the impact on refinery margins and profitability, but UK government policy to set petrol import tariffs at 0% inadvertently undermines these plans. This leads to big financial losses and the closure of two refineries (which are converted to import terminals) with about 2,000 direct job losses.

Northern Ireland

To prevent a hard border, on day one of exit, the UK would impose the “no new checks with limited exceptions” model announced on 13 March. Although, the model is likely to prove unsustainable because of economic, legal and biosecurity risks.
It is predicted that trade will be disrupted in Ireland, causing some businesses to stop trading or to relocate to avoid paying higher tariffs.

Energy supplies

• There will be no disruption to the supply of energy. Although, there may be price increases.

Gibraltar

• Gibraltar will see disruption to the supply of goods (including food and medicines) and to shipments of waste, plus delays of four-plus hours for at least a few months in the movement of people across the border.

UK citizens in the EU

• UK nationals will lose their EU citizenship and can expect to lose associated rights and access to services over time.
• It cannot be predicted what all member states will do. However, in some states UK nationals are advised to take action now.
• An EU member state would continue to pay a pension it currently pays to a UK national living in the EU.
• The commission and individual member states do not agree to extend the current healthcare arrangements for UK state pensioners and tourists beyond 31 October 31, and refuse offers by the UK to fund treatments.

Protests

• Protests are predicted to take place across the UK, using up police resources. There may also be a rise in public disorder and community tensions.

Fishing

• Up to 282 EU and European Economic Area nations’ fishing vessels could enter illegally on day one of exit. This is likely to cause anger and frustration in the UK.

The poor

• Low-income groups will be disproportionately affected by rises in the price of food and fuel.

Social care

• An increase in inflation after the UK’s EU exit would affect providers of adult social care through increasing staff and supply costs, and might lead to failure within 2-3 months for smaller providers and 4-6 months for larger ones.

If you wish to discuss further how ‘no-deal’ may specifically affect your organisation, please get in touch with your GE relationship partner.

*This article is for information purposes only. We are not expressing any opinion on the rights or wrongs of a no-deal Brexit.