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Brexit cascade crisis

Image: Tomasz Iwaniec

At the beginning of 2018, anthropologist David Graeber predicted that Brexit would not happen.  His reasoning was simple enough:

“I don’t think that they were ever serious about [Brexit]. I think that they were just trying to distract attention. People pointed out that most of the things that they would be doing if they were really serious they haven’t done, they haven’t done anything to hire new customs officials, they haven’t done anything to build the building or even buy the land to put the buildings on what they would have to have if they had a hard border.”

This was borne out in evidence to Parliament provided by Dover Port Authority:

“The widespread use of just-in-time supply chains and the growth of e-commerce – nearly 11% last year – requires smooth and predictable trade flows. Dover facilitates this business – there is no substitutable capacity anywhere else in the UK that can take the type and volume of goods handled at Dover…

“Currently, EU trucks account for 99% of freight vehicle traffic at Dover. EU trucks are processed in around two minutes each in the Eastern Docks Ferry Terminal…  Currently, just 1% of our freight vehicle traffic is non-EU. These trucks are customs cleared in around 20 minutes each in the Western Docks. A small freight clearance facility (but still away from the Eastern Docks Ferry Terminal) is therefore adequate for such small volumes…

“In [this] context, there is no space in the Port for additional checks. Customs checks must therefore be conducted away from the Port.”

So Graeber may prove to be correct.  The reason the government has not spent a lot of money on the new facilities may be because they know that Brexit cannot be done.  There is no deal that Theresa May can reach with the EU27 (even assuming that is possible) that would be acceptable to the UK Parliament.  And it is not possible politically for Theresa May to remain as Prime Minister after losing the deal she has spent the past two years developing.  By January 2019 it is very likely that Britain will have a weak, interim Prime Minister who will lack the support and the resources to negotiate in a month what May has failed to negotiate in two years.  And since none of the spineless creatures that claim to represent us in Parliament will put their own necks on the block and unilaterally revoke Article 50, the most likely outcome is a second referendum…

We should, however, consider an alternative scenario.  This is that the government really is as foolish and incompetent as its Brexit negotiation failures suggest.  The failure to consider the need to purchase land and build new customs posts as part of the infrastructure that will be necessary after March next year may really be because these clowns lacked the wit to understand the full consequences of leaving the European Union.  Further evidence that this might be so came from Theresa May’s Brexit lapdog Dominic Raab when he confessed that:

“I hadn’t quite understood the full extent of this, but if you look at the UK and look at how we trade in goods, we are particularly reliant on the Dover-Calais crossing…”

As a result of this oversight, together with the inability to meet its post-Brexit customs obligations – a situation likely to prevent new trade deals in future – the UK population may well face the developed world’s first major famine in the event of a no-deal Brexit.  Stephen Armstrong at Wired reported on the potential risks involved earlier this year:

“At the end of July, Brexit secretary Dominic Raab told parliament that the government was making plans to stockpile food in case negotiations with the EU over a post-Brexit trade deal failed. The task, he said, would be overseen by industry rather than Whitehall…

“Food and retail experts were not reassured and comforted, but stunned. ‘If the day after Brexit suddenly nothing can get through port, there is no stockpiling scenario that solves that problem,’ says Shane Brennan, chief executive of the Food Storage and Distribution Federation. ‘Stockpiling conjures up vision of people putting cans in warehouse today to use in six months time. We do not have that warehouse capacity – never have, never will’.”

Armstrong notes that after Brexit, the UK would have at best 1,000 permits (at worse less than 150) for British lorries to travel to and from the EU every day.  Today more than 10,000 such lorries travel through the Port of Dover alone.  The implication is that the day after the UK leaves the EU, the just-in-time life support supply chains that keep us alive and functioning will come to an abrupt halt.

Raab’s comments and Theresa May’s continuing platitudes suggest that the government simply lacks the imagination to understand the enormity that self-inflicted catastrophe.  The Leave camp’s blithe assumption that since most of the UK’s trade is outside the EU there is nothing to fear from a no-deal Brexit is wildly optimistic at best.  In fact, the majority of our current trade agreements are EU agreements with third countries.  When the UK leaves the EU, those agreements will no longer be in place.  Moreover, Britain’s sudden exit from the various transport agreements that allow ships, planes, trucks and trains to move goods around the world will disrupt (if not halt) the movement of goods and commodities even in circumstances where third countries are prepared to maintain trade arrangements.

If the government was serious about preparing for the potentially fatal consequences of a no-deal Brexit, among other things, local authorities would already be printing and distributing our ration books in anticipation of food shortages from next April.  At the same time, government departments would be busy calculating the impact of key resource and component shortages on the wider economy.  For example, Britain became a net importer of oil and gas in 2005.  Today it also depends upon electricity imported via interconnectors from the EU; particularly during severe weather events.  Government does not, however, appear to have considered how energy and fuel rationing might operate; leaving us, most likely, with the kind of free-for-all that was seen in the fuel blockades of 2000 and 2015 (and 1973 for those old enough to remember it).  So by the time the government starts thinking about rationing, there will be nothing left to ration.

Those politicians who continue to suggest that the UK can seamlessly leave the EU without a deal might want to consider an emergency planning exercise conducted in April 2015, which considered the possibility of a “cascading collapse” of UK infrastructure:

“In April 2014, in Exercise Hopkinson, UK state planners played out a scenario in which a super-storm caused critical damage to the electricity grid in the southwest of England (where Atlantic storms are likely to do the most damage). Two fossil fuel power stations at Indian Queens and Langage are down for planned routine maintenance and cannot be restarted. The Nuclear plant at Hinkley Point is safely shut down, but will take several days before it can be safely restarted.  The result is that Cornwall, Devon and a large part of Dorset are left without power at a time when National Grid workers are struggling to maintain power in the remainder of the UK.”

Unusually, Exercise Hopkinson explored the way in which the collapse of one essential infrastructure network – a lack of electricity – would cascade into other networks.  Hospitals would be forced to close as their emergency generators run out of fuel; resulting in many more deaths.  The transport system would fail as vehicles run out of fuel and cannot be refilled because electric fuel pumps at filling stations no longer work.  Nor could emergency generators be relied on since these, too, depend upon fuel that has to be pumped using electricity. Similarly, the communications system would rapidly fail as phones need to be recharged.  In many areas, water and sewage systems will break down because they depend upon electricity-powered pumping stations. Fire and rescue services would struggle to identify genuine emergencies as alarm systems trip because of the power  failure.  As Emily Gosden at the Telegraph reported at the time, planners are concerned that:

“Populations are far less resilient now than they once were… There is likely to be a very rapid descent into public disorder unless Government can maintain [the] perception of security… Any central Government response to the crisis may be too slow, arriving after the local emergency resources and critical utility contingency measures had already been consumed.”

Exercise Hopkinson was an attempt to understand what physicist and collapse analyst David Korowicz refers to as a cascading collapse of critical infrastructure.  According to Korowicz:

“A globalising, integrated and co-dependent economy has evolved with particular dynamics and embedded structures that have made our basic welfare dependent upon delocalised ‘local’ economies. It has locked us into hypercomplex economic and social processes that are increasing our vulnerability, but which we are unable to alter without risking a collapse in those same welfare supporting structures.”

Brexit, is of course a massive alteration to our “hypercomplex economic and social processes.”

“Our localized needs and welfare have become ever-more dependent upon hyperintegrated globalised supply-chains. One pillar… is the operation of critical infrastructure (IT-telecoms/ electricity generation/ financial system/ transport/ water & sewage) which has become increasingly co-dependent where a systemic failure in one may cause cascading failure in the others.”

Nor is this concern about a cascading collapse entirely hypothetical.  In recent years we have witnessed supply chain failures that have led to precisely the kind of critical infrastructure collapse process that both Korowicz and the Exercise Hopkinson planners anticipated.  In my book, Britain’s Coming Energy Crisis (written before the Brexit vote) I pointed to two:

  • The 2003 electricity grid failure that affected 55 million people in the USA and Canada
  • The 2000 fuel protests in the UK.

The UK fuel protests in September 2000 in particular took the UK economy to the point of collapse long before the UK government had begun to understand the threat that was unfolding:

“On Thursday 7th September 2000 the price of a barrel of oil rose to $35, adding another 2p to the price of petrol in the UK – taking the price at the pump above the iconic £1.00 per litre mark. Angered by the impact on living standards, and taking their cue from a blockade by French farmers, around a hundred farmers and lorry drivers blockaded the Stanlow Shell Oil Refinery in Cheshire. This marked the beginning of eight days of disorder that brought the UK economy to the edge of collapse.

“The following day, a ‘rolling roadblock’ by around 100 lorries brought traffic on the A1 to a standstill. On the same day, protesters blockaded the Texaco refinery in Pembroke.  At this point, the protesters were seen by the establishment as a minor nuisance.  Political leaders were unconcerned.  Nothing much seemed to be happening over the weekend, and the first editions of the Sunday papers barely mentioned the protests.

“However, by the morning of Sunday 10th September a larger than normal number of motorists across the UK – fearful of further protests – began queuing at filling stations in advance of the Monday morning commute.  On the same day, English ambulance trusts instructed their drivers to stick to a 55 mph limit on non-emergency calls in order to save fuel.

“On Monday 11th, public support for the protests grew, and many more lorry drivers and farmers joined in.  There were more rolling roadblocks, including a number through the centre of several cities, bringing many streets to gridlock.  Chancellor Gordon Brown publicly refused to give in to the protests.  Behind the scenes, however, the Queen had been asked to sanction the use of emergency powers to break the blockades.

“By Tuesday 12th, most filling stations in the UK were out of petrol.  Those that still had supplies were rationing users – some to just £5.00 worth of petrol each.  By Wednesday 13th, just 280 of the usual 3,000 fuel deliveries had been made.  Ninety percent of filling stations had no fuel.  The remaining ten percent were rationing fuel and prioritising key workers such as firemen and ambulance crews.  On the same day, around 200 lorries were driven into the centre of London, where they were parked in the roads, causing gridlock throughout the capital.  Across the UK, food rationing was introduced (by supermarket managers) for the first time since the 1950s following panic buying. There was a national shortage of basic staples like bread and milk. Hospitals were struggling to obtain key medical supplies – for example, the Royal Hull Hospital ran out of suture for use in operations.

“On Thursday 14th, as drivers were forced to leave their empty cars at home and turn to public transport to get to work, bus companies began to limit their services in order to preserve their remaining stocks of fuel. Many businesses were unable to function as key employees could not get into work.  Supply chains began to break down as key components were not transported.  At this point, Britain was just days away from a catastrophic collapse. Fortunately, later that day the protesters called off their action, claiming that they had made their point.

“Most of the protests came to an end on Thursday 14th, but the effects continued to be felt for several weeks afterward.  Over the following weekend, as petrol began to get through to the filling stations and food returned to the supermarket shelves, there were outbreaks of panic buying as rumours spread that there would be renewed blockades the following week. Services and firms that ordinarily operate just-in-time supply chains took several weeks to recover as they were forced to transport extra resources and components to make up for the shortfall caused by the protests.  Millions of employees who had been unable to get into work for several days were obliged to catch up on the backlog of work before they could get back to normal.”

When the dust settled, and planners began to take stock of what might have been a major catastrophe if the protests had continued, they were alarmed to discover that nearly ninety percent of all non-fuel deliveries had actually got through.  In other words a mere ten percent reduction in deliveries within the UK economy was sufficient to take the country to the precipice of a cascading collapse.  We can only begin to imagine what might happen when – if the Port of Dover’s evidence is correct – just ten percent of deliveries get through.  And following a no-deal Brexit, those supply chains would not be available to us to allow the kind of recovery that followed the fuel blockades.

The disrupted supply chains brought about by the blockades are evidence for Korowicz’s argument that:

“The components of infrastructure have been designed with the assumption that inputs to maintain, repair and upgrade would be on-stream… We remember that the most complex infrastructure has the most complex supply-chains and is more likely to have more inputs with fewer substitutes.  Thus there is greater risk of critical infrastructure operational failure for want of a critical element.  The complex sourcing and production over the globe means each nation’s particular economic, monetary, and social predicament becomes tied to our own, and ours to theirs…

“Our critical reliance upon complex just-in-time supply-chain networks mean that there is little buffering to protect us from supply shocks.  In the event of a shock, and without any planning, it is likely that unrelieved hunger could spread rapidly.”

A no-deal Brexit will inevitably involve massive and unpredictable disruption to the UK’s just-in-time supply chains that would make the impact of the 2000 fuel protests look trivial.  And yet, as Graeber suggested in January and as Raab’s comments appear to confirm, the UK government has made no serious effort even to understand the depths of the supply chain disruption that they are most probably about to inflict upon the UK population.

Leave supporters will, no doubt, blame this on an incompetent government for failing to negotiate an exit deal… something that depended upon the government not doing anything rash like triggering Article 50 without understanding it.  Conspiracy theorists, meanwhile, will claim that “they” (the establishment, the illuminati, the deep state, the Rothschilds – choose your favourite bogeymen) never intended to leave the EU.  A simpler answer is that our politicians (who seem to spend most of their time worrying about what people say about them on Twitter) simply lack any understanding of how a complex industrial economy actually works.  It was this lack of understanding that allowed pro-Leave politicians to convincingly claim that Brexit would be easy… because they genuinely thought that it would be.  It is, however, telling that when pro-Leave ministers had the opportunity to oust Theresa May as Prime Minister and replace her with one of their own in September, they passed (in the same way as they had done on the morning after the vote).  Even they sense that Brexit will very likely lead to a calamity, and would rather not take responsibility when the UK slips over that particular cliff.

Fortunately, a cascading collapse of the kind outlined here – and to which our complex and interconnected civilisation is increasingly vulnerable – is unlikely to happen in the immediate future.  The most likely outcome for the moment is that Parliament will vote down Mrs May’s Brexit proposals in the unlikely event that they are provisionally agreed with the EU27.  Those same politicians – along with a new interim Prime Minister – will not, however, want to be held responsible for the fallout from a no-deal Brexit.  It follows from this that the most likely course of action – assuming that the EU will permit it (and there are good reasons for them to do so) – will be a pause on the Article 50 process while the UK conducts another “people’s vote” referendum… the inherent risk of which, of course, is that Britain’s rust belt population may treat the warnings of a very likely critical infrastructure collapse as just more “Project Fear,” and vote to leave the EU for a second time anyway.

As you made it to the end…

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