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December 05, 2020

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Home (/) / Perfect winter storm puts UK at risk of post-Brexit meltdown

Perfect
winter storm
puts UK at
risk of post-
Brexit
meltdown
Short Url
Opinion (/Opinion)
https://arab.news/ny2yh
(/taxonomy/term/3631)
Javed Hafeez
(/taxonomy/term/73476)
ANDREW The EU’s chief Brexit negotiator Michel Barnier arrives at St Pancras station
HAMMOND The unwavering OIC
ahead of Brexit negotiations, London, Britain, Nov. 27, 2020. (Reuters)
(/TAXONOMY/TERM/3631)
resolution on (/taxonomy/term/73476
Kashmir
(/node/1772846) /
 December 03,
New OECD data
2020 on Tuesday
23:28
showed that the Zahid Hussain

UK has been hit (/taxonomy/term/61451)

hardest by the The deadlock in

 coronavirus Afghan peace talks (/taxonomy/term/61451
disease (COVID- has broken
 (/node/1772821)
19) crisis,
 economically
speaking, of any
Dr. John C. Hulsman
 G20 state apart
(/taxonomy/term/315256)
from Argentina.
 Yet, amid the Ghost of Je erson
nation’s deepest stirs in US, UK anti- (/taxonomy/term/3152
Follow @arabnews
lockdown protests
recession in
(https://twitter.com/arabnews?
(/node/1772596)
ref_src=twsrc%5Etfw)
more than 300
years, worse
could still be to Andrew Hammond
come thanks to (/taxonomy/term/3631)
Brexit.
Perfect winter
As traumatic as storm puts UK at (/taxonomy/term/3631)
the pandemic has risk of post-Brexit
meltdown
been for the (/node/1772146)
country, with an
economic
contraction of Khaled Abou Zahr
11.3 percent (/taxonomy/term/337656)
expected in 2020,
Reining in Hezbollah
leaked should be key part of (/taxonomy/term/337
government Iran talks
papers last (/node/1772126)
month pointed to
a potentially MORE IN OPINION (/OPINION)

deeper political
and economic
“systemic crisis”
in the coming
weeks. The UK
O ce for Budget
Responsibility
estimated that Latest Updates
the economy will
/
be signi cantly British PM Johnson
to speak to EU chief
negatively as Brexit talks stall
impacted by (/node/1772811/world) (/node/1772811/world)
Brexit, whether
or not there is a
Pakistan reports third
UK-EU trade deal consecutive day of over
agreed and 3,000 infections
rati ed by the (/node/1772866/pakistan) (/node/1772866/pakistan
end of the
transition period Pakistan opposition
on Dec. 31. says to decide next
week on resigning from
It was in the assemblies (/node/1772861/pakistan
(/node/1772861/pakistan)
midst of this
gathering storm
Iran’s coronavirus
that a leaked UK deaths surpass 50,000
Cabinet O ce — health ministry
brie ng last week (/node/1772851/middle- (/node/1772851/middle-
warned of a east)
east)
“notable risk”
that the country Cargo ship attacked
could face a o Yemen under
perfect winter unclear circumstances
(/node/1772831/middle- (/node/1772831/middle-
storm of east)
east)
challenges. These
include the
prospect of a bad
u season on top
of the COVID-19
crisis, severe
ooding, and
coordinated
industrial action
around the end
of the transition
period.

The leaked
brie ng lays out
for government
planners what it
calls “reasonable
worst-case
scenarios” across /
20 areas of
national life,
from oil and
healthcare to
travel and
policing. For
instance, it
indicates
economic chaos
could raise the
risk of a
breakdown in
public order and
a national mental
health crisis,
while reducing
the nancial
levers available
for the
government to
respond to other
risks.

Whether this
systemic
economic crisis
comes to pass or
not, many UK
policymakers are
already bracing
for the end of the
transition period
following the
country’s
departure from
the EU. The
challenges here
are wide-
ranging. Take the
example of UK
food supply
chains, which
will be disrupted,
/
given that the
stockpiles built
up at the end of
2019 have already
been diminished
during the
pandemic and
will not easily be
replenished. The
Cabinet O ce
paper indicates
that low-income
groups will be
most at risk of
food insecurity,
including single
parents, children
in large families,
and those with
disabilities.

There is also a
signi cant risk to
the health and
social care
sectors of
potential labor
shortages
because of the
UK’s continuing
reliance on EU
citizens and a
workforce
already stretched
by pandemic
controls.
Moreover, a drop
in imports of
medicines is also
agged as a
serious potential
problem, putting
patient safety at
/
risk, despite the
fact that in
October the
government
announced ferry
freight contracts
worth nearly £80
million ($107
million) to try to
ensure medicines
and other vital
supplies continue
to reach the UK
from Jan. 1.

This possible
systemic crisis is
especially
worrying some
policymakers,
given that central
and local
government
authorities and
businesses are
still recovering
from the
pandemic and
are not fully
prepared for life
outside the EU’s
single market,
regardless of
whether talks on
a post-Brexit
trade deal are
successful or not.
Much of the
private sector has
diminished
capacity, post-
COVID-19, to
deal with any
/
 nancial shock
caused by Brexit.
The fragility of
many companies
will have an
impact on
business
readiness and
vulnerability
toward the end of
the transition
period, including
the possibility of
signi cant
further
commercial
failures.

" Much
of
the
private
sector
has
diminished
capacity,
post-
COVID-
19,
to
deal
with
any
nancial
shock
caused
by

"
Brexit.
Andrew
Hammond

/
In the public
sector too,
challenges are
growing, and
they will not be
helped by the fact
that some 1.3
million public
sector workers
will see their pay
frozen in 2021-22,
despite being on
the front-line of
the pandemic for
much of this
year. Local
council nances
are particularly
weak, with
reduced capacity
to absorb and
implement the
required changes
following the end
of the transition
period. It is
estimated that
about 5 percent
of them are at
high risk of
nancial failure
in the wake of the
pandemic, even
after central
government
support.

One of the key

challenges facing
the UK with
Brexit is that,
despite there
being less than a
/
month until the
end of the
transition period,
it is still not clear
if there will be a
rati ed trade
deal with the EU.
This means there
will be only days
to prepare for
new regulatory
regimes,
including border
checks and
paperwork.

The UK
government has
particular blame
here for
choosing, earlier
this year, not to
extend the
transition period,
which would
have given it
additional time to
negotiate a deal
and prepare for
its consequences.
This means
disruption in
January is now
all-but inevitable,
including on
borders, and it is
likely that key
areas of any
post-Brexit
settlement —
including the
Northern Ireland
protocol, which
/
US President-
elect Joe Biden is
paying close
attention to —
may not be
implemented on
time, since new
IT systems and
any
infrastructure
required for
border control
posts are
probably not
going to be ready.

This gathering
storm will be on
Prime Minister
Boris Johnson’s
mind, and indeed
those of the EU
decision-makers,
as the Brexit
end-game plays
out. Even if a
trade agreement
is rati ed with
the EU before
Dec. 31, this will
still see
signi cant
economic
disruption on top
of the pandemic’s
devastation.

Andrew
Hammond is
an Associate at
LSE IDEAS at
the London

/
 School of
Economics.

Disclaimer:
Views
expressed by
writers in this
section are
their own and
do not
necessarily
re ect Arab
News' point-of-
view

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