U.K. Warns of Sweeping Risk of Chaos From No-Deal: Brexit Update

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The U.K. published warnings of disruption to trade, financial services and food supplies if it leaves the European Union without a deal on Oct. 31.

The document, which also warns of the threat of public disorder, was produced as part of no-deal Brexit planning under the code-name Operation Yellowhammer. It was released on Wednesday evening after lawmakers voted to force Boris Johnson’s government to make it public.

Key Developments:

Johnson said he wants a deal with the EU but that the U.K. can manage withoutScottish appeals court rules suspension of Parliament is unlawful,” setting up Supreme Court showdownGerman Chancellor Angela Merkel pledged to work until the “last day” to secure a Brexit agreementThe government said it would look “closely” at Hong Kong Exchanges & Clearing’s surprise bid for London Stock ExchangeMust read: Four Ways Johnson Could Break the Brexit Deadlock

Shortages of Fuel, Food, Clean Water (8:35 p.m.)

There are risks of disruption to fuel supplies to London and the south-east, with localized shortages across the U.K., the no-deal Brexit planning document warned.

While the threat to the supply of clean water is “low,” it is possible that hundreds of thousands of people will experience problems. That could mean urgent steps are needed to shore up the water supply, the document said.

Food prices will rise, and certain types of fresh produce will be harder to get in shops. The issues are likely to be worst in the run-up to Christmas, the busiest time of the year for the food industry, and the government cannot anticipate all the potential impacts on the food supply chain, it said.

“There is a risk that panic buying will cause or exacerbate food supply disruption,” the document said.

‘Severe’ Risk to Irish Border Without a Deal (8:30 p.m.)

The U.K. expects Northern Ireland would be worst hit, with tariff and regulatory checks on goods moving over the border that would “severely disrupt trade” if there’s a no-deal split from the EU, the newly released document says.

The government accepts that its plan not to introduce border checks “is likely to prove unsustainable due to significant economic, legal and biosecurity risks.” It expects businesses to close, relocate or raise prices, leading to job losses, protests, and an increase in black market activity.

The effect of all that, the government says, will be “significant pressure” to return to the negotiating table with the EU “within days or weeks.” Meanwhile the government doesn’t see any hope that the EU will be feeling similar levels of pressure, as the document talks about “a small number of instances where the impact of Brexit could be felt negatively in the EU”.

Delays at Ports After No-Deal Split (8:15 p.m.)

Most of the government’s assumptions about no-deal Brexit problems flow from expected problems at ports and the Channel Tunnel. Here’s more detail about the expected problems:

Between 50% and 85% of hauliers won’t have the correct paperworkFlow rate reduced to between 40% and 60% of current levels, as unprepared trucks fill portsAfter three months, that flow rate would rise to 50% to 70% of current levelsTrucks face maximum delays of 1.5 to 2.5 daysDisruption expected to last for six months

No-Deal Risks to Trade and Public (7:50 p.m.)

The U.K. government expects a no-deal Brexit would mean the flow of traffic through ports would be more than halved on day one, with trucks delayed by as long as two and a half days, leading to disruption to food and medical supplies.

The disruption could last up to six months, according to the “reasonable worst-case assumptions”, which Parliament this week ordered the government to publish.

The document also warns of unspecified disruption to financial services, increases in electricity prices, possible protests, and clashes between fishing fleets from different nations. It says poor people will be worst affected by increases in food and fuel costs.

Johnson Says He’s Focused on ‘People’s Priorities’ (5:40 p.m.)

In his Facebook Q&A session, Boris Johnson also took questions on homelessness and the National Health Service, and stressed the importance of moving on from Brexit and dealing with the “people’s priorities.”

Among other things, he pledged to bring in a homelessness czar as well as a national plan to tackle the problem, and cited the importance of holding a Queen’s speech so the government can spell out its legislative priorities. Echoing his spokesman’s comments (see 1 p.m.), he said that was the reason for proroguing Parliament. His comments come after a Scottish court ruled the decision to do so was an unlawful attempt to stymie the legislature.

Johnson Rules Out Northern Ireland-Only Backstop (5:20 p.m.)

In an Facebook Q&A session, Boris Johnson ruled out the idea of a Northern Ireland-only backstop, saying that it would not work for the U.K. The idea had been gaining traction among politicians as a potential way to end the impasse, and Johnson himself has previously said an all-Ireland agri-foods zone — which falls far short of the backstop — could be the “germ” of a solution.

“We’ve got to come out whole and entire and solve the problem of the Northern Irish border, and I’m absolutely certain we can do that,” Johnson said. He reiterated that the U.K. must leave the EU on Oct 31, and that while his government wants a divorce deal, the country could manage without one.

“We will work very hard for a deal in the course of the next few days and weeks and we’re making great progress,” Johnson said, citing talks with Irish Prime Minister Leo Varadkar, French President Emmanuel Macron and German Chancellor Angela Merkel. “The mood is changing, the ice flow is cracking, there is movement under the keel of these talks.”

MPs: ‘There’s a Hell of a Lot of Work to Do’ (2:40 p.m.)

A group of cross-party MPs protested outside Parliament against its suspension, saying they want to be able to properly scrutinize documents on the government’s planning for a no-deal Brexit, code named Operation Yellowhammer, which have to be published today.

“We’ve got a hell of a lot of work to do sifting through these Yellowhammer documents when we eventually see them,” said Labour’s Rosie Duffield. “And getting on with sorting out what we’re going to do with Brexit.”

MPs voted on Monday to force the government to publish the papers, as well as correspondence and documents related to the decision to suspend Parliament. Some lawmakers also sat in the chamber as a protest against the suspension.

Johnson Rules Out Deal With Farage (1.30 p.m.)

Boris Johnson has rejected an offer of an electoral pact from Brexit Party leader Nigel Farage, who had proposed his party not stand against the Conservatives in selected seats in return for similar treatment elsewhere. But a Conservative spokesman ruled that out.

Electorally, it would likely have destroyed any hope Johnson has of retaining the more liberal part of his political coalition.

Ruling Centers on Motivation for Prorogation (1:20 p.m.)

The Scottish ruling (see 10:15 a.m.) cut through arguments that the suspension or prorogation of Parliament wasn’t a matter for the courts. If the purpose of prorogation was to “stymie Parliamentary scrutiny,” then it was unlawful, the appeal judges said.

The court was shown documents including a handwritten note from Johnson that dismissed the Parliamentary session as nothing but a “rigmarole.” Such documents demonstrated that curtailing the ability of Parliament to hold the government to account was “the true reason for the prorogation,” Colin Sutherland, Scotland’s most senior judge, said in the brief decision.

His colleague, Judge Philip Brodie, went even further, calling this particular suspension was an “egregious case of a clear failure to comply with generally accepted standards of behavior of public authorities.”

‘Govt Has to Obey Law’: Johnson’s Spokesman (1 p.m.)

The U.K. government will abide by the ruling of the Supreme Court once it has considered appeals on the suspension of Parliament next week, Johnson’s spokesman James Slack said.

“We have absolute respect for the independence of the judiciary,” Slack told reporters at a hastily convened briefing. “The government will abide by the Supreme Court judgment.”

“We are disappointed by today’s decision, and will appeal in the Supreme Court,” Slack said of the ruling by a Scottish Appeals Court (see 10:15 a.m.). He said there is a need for a Queen’s speech to set out the government’s agenda, and “proroguing Parliament is the legal and necessary way of delivering this. There are now contradictory judgments in the English and Scottish courts.”

Parliament to Stay Suspended: U.K. Official (12:55 p.m.)

The U.K. Parliament will remain suspended, or prorogued, pending a ruling by the Supreme Court, a government official said, speaking on condition of anonymity.

Boris Johnson’s government has appealed to the Supreme Court after today’s ruling in a Scottish Appeal Court and the case, alongside one from an English court, is expected to be heard next week.

Earlier, a spokesman for Speaker of the House of Commons John Bercow said: “Any decision to accelerate the meeting of Parliament during prorogation is a matter for the Government.”

Justice Secretary Defends Judges (12.15 p.m.)

Justice Secretary Robert Buckland, who on Sunday took to Twitter to assure the public the government will obey the law over Brexit, has now jumped to the defense of the country’s independent judiciary.

“Our judges are renowned around the world for their excellence and impartiality and I have total confidence in their independence in every case,” Buckland said on Twitter, in what looks like an attempt to head off any colleagues in the Conservative Party from criticizing the Scottish court.

Grieve: Johnson Must Quit If He Misled Queen (11.45 a.m.)

Former Attorney General Dominic Grieve, one of the MPs Boris Johnson expelled from the Conservative Party last week, said that if it was shown that the prime minister had misled the Queen about the reasons for suspending parliament, it would be a “shameful act” and the prime minister would have to resign.

“The PM has a duty of total candor towards the Queen,” Grieve told the BBC. “If that were to be the case that it had happened, then Boris Johnson would find himself in an untenable situation in Parliament.”

Opposition MPs Demand Recall of Parliament (11:10 a.m.)

Following the Scottish court ruling that Johnson’s decision to suspend Parliament was “unlawful,” prominent opposition politicians are calling on the prime minister to recall the legislature immediately. The government said it plans to appeal the ruling to the Supreme Court.

“I urge the Prime Minister to immediately recall Parliament so we can debate this judgment and decide what happens next,” Labour’s Brexit spokesman Keir Starmer said on Twitter.

Ian Blackford, the Scottish Nationalist Party’s leader in Westminster, accused Johnson of “playing fast and loose with the law.”

Government ‘Disappointed’ at Court Ruling (10:40 a.m.)

A spokesman for the U.K. government responded to the Scottish court ruling (see 10:15 a.m.), confirming it will appeal the decision.

“We are disappointed by today’s decision, and will appeal to the U.K. Supreme Court,” the spokesman said in a statement. “The U.K. government needs to bring forward a strong domestic legislative agenda. Proroguing Parliament is the legal and necessary way of delivering this.”

Starmer: Govt Not Making Progress in EU Talks (10:20 a.m.)

In a speech to the Trades Union Congress, opposition Labour Party’s Brexit spokesman Keir Starmer told the audience not to be fooled by government claims to be making progress in Brexit negotiations with the EU. The U.K. hasn’t even made any proposals to the EU side, he said.

“The truth is I don’t think Johnson has the first idea how to negotiate a deal that protects jobs and rights,” Starmer said. “For the Tories, that’s not what Brexit is about.”

Starmer said Brexit would be a central issue in any general election and that voters are “yearning to move on.” He said a referendum is “the only way forward” and Labour wants a ballot that includes Remain and a “credible” option for leaving the bloc.

Scottish Court: Parliament Suspension ‘Unlawful’ (10:15 a.m.)

A Scottish appeals court ruled that Prime Minister Boris Johnson’s suspension of Parliament is unlawful, sowing even more confusion into the deadlocked British political system ahead of the Oct. 31 Brexit date.

The judges deferred implementing the ruling until the U.K. Supreme Court takes up the issue next week. A group of more than 70 lawmakers had argued the premier’s move was unconstitutional because it curtailed debate in the run-up to the deadline for Britain’s exit from the European Union.

U.K. Parliament’s Suspension is Unlawful, Scottish Court Rules

Leadsom Says U.K. Wants Irish Backstop Removed (10 a.m.)

In her media round on Wednesday, Business Secretary Andrea Leadsom said the government is “negotiating very hard” with the EU to “very explicitly remove the backstop from the withdrawal agreement.” She told BBC TV that Boris Johnson is “seeking alternative creative ways’’ to avoid a border between Northern Ireland and the Republic of Ireland.

She declined to “negotiate in public” on what those solutions may be, but said they range from technological solutions to pre-customs checks. “Essentially what we will be doing is ensuring we protect the United Kingdom and the integrity of the United Kingdom internal market,” she said.

MPs are discussing the revival of an idea to put a border down the Irish Sea. That would make the province the only part of the U.K. to remain aligned to European Union rules, allowing the free flow of goods over the land border with the Irish Republic until alternative arrangements can be agreed.

It’s an idea that has caused anger in the Democratic Unionist Party, who have 10 MPs in the U.K. Parliament, because they don’t want to be treated differently to the rest of the U.K.

Speaking to Bloomberg TV, Leadsom appeared to reassure the DUP: “We won’t do anything that undermines the integrity of the U.K.” either politically “or from the point of view of harming the U.K. internal market,” she said.

Foster: Johnson Gave Assurances on Backstop (Earlier)

DUP Leader Arlene Foster told BBC Radio Ulster on Wednesday that Johnson gave her assurances that he is not pushing for a Northern Ireland-only backstop. But she didn’t rule out an all-Ireland zone for livestock and agricultural goods — which Johnson has said could represent the “germ” of a solution to the border issue.

“What we’re doing is exploring ideas,” Foster said. “What we’re doing at the moment is working with the prime minister to try and find a deal what works for us in Northern Ireland, works for the Republic of Ireland, and our neighbors in the Republic of Ireland, but also means we leave the European Union, the United Kingdom. all together.”

Merkel to Work Until ‘Last Day’ to Secure Deal (Earlier)

German Chancellor Angela Merkel said her government will work until the “last day” to ensure the U.K. leaves the European Union in an orderly way, but insisted Germany is ready for a no-deal Brexit.

“I’m firmly convinced as before that we have every opportunity to do it in an orderly fashion — and the German government will work until the last day to ensure that that’s possible,” Merkel told lawmakers on Wednesday. “But I can also say that we’re prepared for a disorderly exit.”

Spain Says U.K. Is Heading for a No-Deal Brexit (Earlier)

Spain won’t allow further concessions to the U.K., which now seems set to leave the European Union without an agreement, acting Prime Minister Pedro Sanchez said.

No further negotiation of the withdrawal agreement already endorsed by the EU is possible and there is no room for further concessions, Sanchez told the Spanish parliament in Madrid on Wednesday.

“What some months ago seemed unthinkable — a hard Brexit or Brexit without agreement — has now become a more than probable scenario,” Sanchez said.

Earlier:

Four Ways That Britain’s Brexit Drama Could Play Out NextEU Appointments Bring Good News for Ireland: Brexit BulletinBelfast Court to Rule Thursday on Brexit Peace-Plan CaseCarney Says Brexit-Hit Pound Looks Like Emerging Market Currency

–With assistance from Alastair Reed, Jonathan Browning, Charles Penty, Patrick Donahue, Arne Delfs, Kitty Donaldson, Sharna Hawkins and Jessica Shankleman.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Alex Morales in London at amorales2@bloomberg.net;Tim Ross in London at tross54@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Thomas Penny, Stuart Biggs

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