19th August 2019

Written by Katie Stanton (Associate)

Katie Stanton kicks off the week discussing Operation Yellowhammer, the UK government's contingency plan for a no-deal Brexit confirming our worst fears.

Good morning,

Admittedly, I have struggled to write even one positive sentence this morning. Initially, I crafted a truly miserable monologue, before deciding that Monday was perhaps not the place for a soliloquy on the perils of the internet and the tragedy that is mass human bystandership.

Maybe another time.

Still, my attempt to be cheerful has proven futile – I blame the weather. And the news. Instead, I’ve ended up cobbling together the following thoughts on the equally depressing Operation Yellowhammer.

Details are much less 007 than the name would suggest – although people will probably die, so at least there’s that for excitement in the absence of Daniel Craig.

The leaked document obtained by The Sunday Times sheds light on the government’s no-deal Brexit preparations.

Unsurprisingly, the public and businesses remain largely unprepared for a no-deal and growing Brexit fatigue has made our contingency planning far too sluggish.

In no particular order, we’re facing: shortages of fuel, food and medicine, a three-month meltdown at our ports and rising costs in social care. The government expects a hard border with Ireland after all, as current plans to avoid checks will prove unsustainable. People won’t know how to manoeuvre through French customs for at least three months; fishing vessels will undoubtably be operating illegally in foreign waters; and Gibraltar will basically grind to a halt. Additionally, widespread protests will soak up police resource and passengers will be delayed at airports across Europe.

All this and more is a “realistic assessment of what the public face”, according to a senior Whitehall source. They are “basic” and “reasonable scenarios”. Michael Gove has since stepped in to reassure us that they are, in fact, “worst case scenarios”. I don’t know about you, but these mixed messages are not exactly filling me with hope. 

While Operation Yelllowhammer doesn’t go much further than the wild postulations some papers have been churning out for the past three years, there’s something much more daunting about seeing it written down. In black and white. From the government.

No longer can we label it “fanatical press” or “scaremongering” and file it away in the crazy bin; our fear has been legitimised by the powers that be, we’re officially going down the toilet.

Meanwhile, Brexit secretary Stephen Barclay has signed the commencement order that will end the sovereignty of EU law in Britain on October 31st. The move comes as Boris Johnson gets ready to demand a new Brexit deal from EU leaders on a trip to Berlin this Wednesday. He had been reluctant to meet with them until it seemed a breakthrough was likely – which it still doesn’t.

One can only hope then that all of this is just another tactical escalation in what’s becoming a frankly frightening game of chicken. But that would assume that Johnson knows what he’s doing; and the jury’s still out on that one.

News

Prince Andrew has said he is “appalled” by sex abuse claims surrounding his former friend Jeffrey Epstein, following the release of Daily Mail video footage which claimed to show the Duke of York inside the financier’s Manhattan mansion in 2010. Epstein recently took his own life while in jail awaiting trial for sex trafficking offences.

According to official data, more than ten million patients a year are exposed to a dangerous level of air pollution when they visit hospitals. The data found that a quarter of hospitals in England are in areas which exceed the limit for toxic fine particles recommended by the World Health Organisation. (£)

Jeremy Corbyn will accuse Boris Johnson of being a “fake populist and phoney outsider” as he sets out his election pitch to transform the country later today. The Labour leader will give a flagship speech in the key marginal seat of Corby in the east Midlands, as speculation grows about an election in the coming weeks.

Business & Economy

Chancellor Sajid Javid has said he has no plans to make house sellers rather than buyers pay stamp duty tax. His comments come after it was reported in Saturday’s Times that he was considering the idea to save first-time buyers from paying the tax, despite stamp duty being abolished in 2017 for first homes up to £300,000.

National Grid routinely restricts the use of its own power cables from the continent because of the risk of blackouts it they fail, according to a senior source. Britain’s electricity supply is sufficiently fragile at certain times of the day that if one of the subsea “interconnectors” trips while importing at full capacity, it could trigger power cuts. National Grid has to pay suppliers not to use the cables; a cost they see as low when compared with the implications of a power outage. (£)

The new owner of British Steel is planning a productivity drive that could lead to several hundred job losses. Toker Ozcan, head of mining metallurgy group at Oyak, the Turkish military pension fund, said in an interview that the group’s immediate priority would be to boost output. According to Ozcan, productivity at the company’s main plant in Scunthorpe is comparatively very low. (£)

Markets

The week ahead

Much of this week will be dominated by the run-up to the G7 summit in the French seaside town of Biarritz this coming weekend. The main topics are likely to include the Iran nuclear deal, the taxation of big multinationals, including tech giants such as Facebook and Google, and Brexit. The summit will mark Boris Johnson’s first appearance on the world stage and Germany has suggested he may use it to declare either a breakthrough or breakdown in talks on Britain leaving the EU.

The Fed will also get a fair slice of attention as the minutes of July’s meeting – when it cut rates for the first time since 2008 – are released on Wednesday. The following day the central bank will host its annual economic symposium in Jackson Hole, Wyoming, where chair Jay Powell is among those scheduled to speak. The minutes from the last European Central Bank meeting are also due on Thursday.

Hong Kong will remain in the spotlight as tension grows amid pro-democracy protests.

Italian prime minister Giuseppe Conte will face a no-confidence vote on Tuesday following the near-collapse of the right-wing League party’s alliance with the anti-establishment Five Star movement. The relationship between the two governing parties has been tense in recent weeks after the two clashed over a series of policies including greater autonomy for the regions, justice reforms, motorway concessions and plans to boost public spending. The outcome of the vote could have wider implications for global markets.

Finally, it’s a quiet week for economic data and companies front earnings season is drawing to a close. Still, the remaining updates from US retailers should offer more insight on consumer spending, while the travel sector faces disruption with strikes at Ryanair.

Whats happening today?

Finals

BHP Group Omega Dia

AGMs

AorTech International Castleton Northern Bear Richland Res

EGMs

Orascom Inv

Int. Economic Announcements

(07:00) Wholesale Price Index (GER) (09:00) Current Account (EU) (10:00) Consumer Price Index (EU)

Columns of Note

Kevin Pringle argues in The Sunday Times that, in this era of binary politics, the right way forward is a very un-British coup to put Labour leader Jeremy Corbyn at the helm. Following a vote of no confidence in the government, Corbyn’s plan would see him lead a “strictly time-limited temporary government” with the aim of calling a general election and securing an extension to the Brexit departure date. At the election, Labour would be “committed to a public vote” on the terms of Brexit, including an option to remain. The author argues this is the most likely way of bringing order out of such chaos. (£)

In this week’s Spectator, Lionel Shriver writes that contraception is the answer to climate change. She suggests that we seem somehow to have forgotten that more people equals more emissions. While we may have stemmed birth rates in the west, they remain “concerningly high” in the developing world. She concludes: if you care about the climate, then supporting organisations to provide greater access to contraception globally is more effective than pulling an Extinction Rebellion move and “gluing yourself to Waterloo Bridge”. (£)

Did you know?

In Switzerland, it’s illegal to own only one Guinea Pig in case it gets lonely.

Parliamentary highlights

House of Commons

In recess until 3rd September

House of Lords

In recess until 3rd September

House of Lords

In recess until 2nd September