- [Saabira] When I buy groceries here in England,
I usually like to pick up things like apples,
peppers, cheese, and wine,
but that's now, before Brexit.
If Britain were to crash out of the EU without a deal,
these products might be hard to find
in my local supermarket, so some economists say
my grocery basket may look more like this.
For the last few years, government agencies and companies
across the country have been studying what might happen
in case of a no-deal Brexit.
- It's better for all of us if we can leave the EU
with a withdrawal agreement in place.
The government needs to be prepared for every eventuality,
the departments all working on the basis
of a reasonable worst-case scenario.
- The government has been doing a lot
to try and prepare for a no-deal Brexit,
but there is a limit
to what the UK government can do on its own.
- According to government documents,
Bank of England reports, and other studies,
buying groceries would only be one of my problems.
Studies warn we could see home prices plummet
by as much as 30%, medicine shortages,
and a jump in inflation.
First, let's explain what a no-deal Brexit actually is.
In 2016, Britain voted to leave the European Union.
Hence, Brexit.
Now, Prime Minister Boris Johnson says he's working
to achieve what his predecessor, Theresa May, couldn't.
(crowd jeering)
- Nothing--
- [Saabira] Strike an exit deal with the EU
that Parliament can get behind, too.
If he can't, well,
Johnson said he's pulling the UK out anyway.
- We're leaving on the 31st of October, no ifs or buts.
- [Saabira] If that happens,
Britain would leave the European Union overnight
with no transition period to ease out of its membership.
That would be a no-deal Brexit,
and according to a government document
known as Operation Yellowhammer,
the consequences could be pretty dire.
- Food shortages, crisis at the border,
even the risk of rioting across the UK.
- Food supplies and the economy as a whole
could be hit, while government spending could dry sharply.
So let's go back to those groceries.
This pile is what we produce in the UK,
and this is what we import. (tense electronic music)
In a no-deal scenario, these fresh fruits and vegetables
from other EU countries could go bad
before they even reach the UK.
That's because thousands of shipments
would have to go through new customs checks
which could cause traffic jams and huge delays.
William Bain of the British Retail Consortium
explains that the UK's particularly vulnerable
to food shortages.
Could you talk about how the UK stacks up
against other countries, like, say, the U.S.,
in terms of our dependence on food imports,
particularly from the EU?
- So we've been a net importer of foods, really,
for the last few decades.
I think consumer tastes are not going to change too much
and we're still going to want to have our sandwiches
with some tomato in it
in December as much as we do in June or July.
- [Saabira] For British exporters,
a no-deal could also mean tariffs on products
like cheese and beef, which, retailers say,
could see levies of nearly 50%.
So how can Britain keep buying and selling goods
across its borders?
One answer could be negotiate new trade deals.
As of September 2019, the UK government
said it signed 14 new trade deals.
25 others are still in the works,
but replacing the EU bloc,
which is by far the UK's main trading partner,
won't be easy. (dramatic mallet percussion)
- One of the difficulties for knowing exactly what
the impact of coming out of a deep free trade agreement is
is that countries haven't really done this in the past.
There have been lots of examples of countries
trying to integrate their trade more closely.
There's essentially no examples
of countries moving in the other direction.
Perhaps the only example in the past
was the breakup of the USSR.
That was a single economic bloc
that then broke up, but really apart from that,
there's no past precedent to look back to.
- [Saabira] The Bank of England's latest estimates say,
in a worst-case scenario, GDP could fall by 5.5%,
unemployment could almost double to 7%,
and inflation could peak at 5.25%
Other reports disagree on precisely
how much the economy will be hurt by Brexit,
but the vast majority of economists agree
it wouldn't be good for the UK's economic growth.
Adding a no-deal into the equation, even worse.
So what is the government doing about it?
- They currently have about 17,000 civil servants
working on this specifically, and that is everything
from trying to make sure that there are systems in place
at the borders, at the ports, to ease the flow
of lorries going through to France.
- [Saabira] If the UK does leave the EU without a deal,
the UK government may have to borrow
around $37 billion every year
from fiscal '21 onwards, according to one estimate.
Those who support a no-deal say the investment is worth it
because it will lay the groundwork for a new, stronger UK,
but those who oppose no-deal
say there will be too much damage.
- Even with those best mitigations,
it doesn't take away from the harm
that's gonna be caused to the consumer by a no-deal Brexit.
- Brexit opened up a huge amount of debate
about the UK's trading relationships,
not only with the EU, but with the rest of the world.
- [Saabira] We'll see what happens on the Brexit deadline,
but like many Brits, I may want to stockpile
some of this stuff just in case I can't get it anymore.
(quietly tense mallet percussion music)