12 February 2019

Preparing for No Deal does not mean the sky is about to fall in


Despite our long addiction to a free and purple press, a gluttonous surfeit has taken Brexit coverage to a fairly prickly place. Things have come to such a pretty pass that the more hysterically anti-Brexit papers now cover, to their own surprise, reports that the world will not collapse in April in the event of a No Deal scenario.

A recent report from the National Institute of Economic and Social Research indicates that withdrawal through No Deal and into a WTO environment would be heavily mitigated by contingency plans currently being prepared in both Whitehall and Brussels. Ministers could then further reduce the impact by introducing business-friendly policies so that, while there was still an economic consequence from the changes, a recession could be avoided.

Neither of these two prospects, nor the end consequence, should be a surprise. Notwithstanding the political decision to suppress talk of No Deal planning prep (especially supported by sections of the Treasury that are happy with squatting in both a customs and a regulatory union), a lot of work has in fact been done across Whitehall to cushion transition.

Even the European Commission, seemingly unprompted by anyone on the UK side, in December published its own list of areas where it was prepared to declare transitional contingency plans that merely required reciprocation to take effect. They included those great Project Panic multipliers – social security continuity, aircraft landing rights and road haulier licensing.

Project Fear Banter has become so hyperventilated these days that the monarch is practically already in her back garden waiting to be airlifted from Mad Max Britain. Never mind that the Air Reichsmarschall failed to achieve it; apparently rioting mobs on the rampage for missing Mars bars will force our head of state to flee.

That story is as ridiculous as a host of others that have been doing the rounds: not for the reason that it is statistically impossible, but because it is predicated on a misunderstanding of what the original documents are intended to do, and how contingency planning is undertaken.

It may help if we imagine modelling based on two cones, with the point of each cone being Brexit Day. One cone heads outwards from the tip and covers future threat; the other narrows into the tip and represents current mitigation.

With the threat cone, what lies within the core body is what is probable; what sits nearer the cone edge is conceptually possible but increasingly unlikely. With the passage of time the cone continues to arc outwards and various things become more plausible as events unfold, and indeed other events mean they might have happened anyway – say, a world shortage of cocoa crop next year reducing the availability of those precious Mars bars.

Planners need to consider all eventualities. They need to pay particular attention to the most likely; but they also need to consider the wild cards, and particularly those which generate the most risk and the greatest dislocation. The chance of the latter happening might be the square root of remote and with high impact; the chance of the former might be very high, but with small impact. Both need to be put down in writing and considered.

Of course, when a story about high impact mitigation is released to the press, it makes for a sensational headline. That, incidentally, will be exactly the response sought by whoever was leaking the story in the first place, delivered for political result. But it is devoid of context unless it also states what the assessed probability of an event is rated at.

The reason “Project Fear” has entered the lexicon is precisely because these super-low-chance scenarios, a number of them raised purely speculatively and even subsequently rejected by their own teams as not remotely plausible after a few minutes’ rational review, have been touted as fact by those who are unfamiliar with risk management processes — including, as it happens, past and wannabe ministers.

An anecdote suffices to burnish the necessary caveat to such reports. A rather splendid obituary a couple of decades ago in the Daily Telegraph followed the career of a distinguished military officer. Early on, he was assigned a junior stint in the Old War Office, which he spent writing the contingency plan for an alien invasion. The fact that it was ever written does not alone indicate the MoD expects to be countering Plan 9 From Outer Space.

While it may be reassuring there is something on file that could be dusted down (minus references to Victor Bombers and the British Army of the Rhine) should the worst happen, 40 years on it has still not been deployed. But having a contingency plan is what contingency planning is all about. America and the UK each had a contingency plan for going to war with each other in Canada in the 1930s. Having a back-up plan of itself does not guarantee it will happen, any more than having car insurance guarantees you’re going to have a crash.

The second cone, however, is also important, this one disappearing into the point of Brexit Day itself. Prepping for No Deal changeover does require feed-in time. There will presumably still be a number of decision points remaining in the planning process that have not been triggered yet as they carry late deadlines. That is not universally the case. One, for instance, was sagaciously met when the MoD halted the scrapping of three River Class vessels several months ago, so they could supply surge support to fisheries policing work. Had that call not been made at that time, they would have been scrapped and the assets would now not be available if DEFRA asked for them.

Imagine if the Government earmarked a Ministry of Defence site, such as (utterly speculatively) the Lydd or Hythe Ranges, as an additional location over the short term for away-from-port customs checks or stacks. Prepping those in advance would require generating a series of plans – for example, shifting training elsewhere; signing off training year certification extensions where slots can’t be allocated; possibly moving training personnel, and assessing welfare cases of affected service families; contract catering provisions for locally posted Border Force staff; reviewing security arrangements; checking access routes and strength of hard standing; liaising with the local community over road safety issues; reviewing mechanisms for refuelling refrigerated lorries during delays; and so on and so forth, down to the portaloos and checking internet connection.

Finding an individual solution like the above may thus itself generate consequential preparatory work. Some would require more than a quick sign-off on an authorising document, and all have differing lead-in times and deadlines. The consequences of missing some might be trifling, others more important.

This is where the second cone comes in. The more contingency prep is carried out in advance, the fewer items fall out of the cone by the time of Brexit Day. Some areas will inevitably end up having to be signed off ‘at risk’; that is the nature of contingency planning. But these should be the exception, and mitigated wherever possible by work undertaken elsewhere.

I do not envy Whitehall’s hidden battalions of Brexit planners. Where any particular element goes amiss, it will not necessarily be their fault. More likely, it will be because people at the top of the Cabinet Office forgot the pledge that “No Deal is Better Than a Bad Deal”, and chosen to focus on the pursuit of marginal brinkmanship in the latter.

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Dr Lee Rotherham is Director of think tank The Red Cell, Executive Director of Veterans for Britain and Chairman of the appeal to establish a Museum of Sovereignty. He was Director of Special Projects at Vote Leave.