Coronavirus crisis: UK should delay Brexit

For the first time in years, Brexit is no longer top of the news agenda. It was going to happen eventually, but sadly it hasn’t come as a relief because it has been toppled by an unfolding crisis which, for the time being, makes all other things seem unimportant.

The Coronavirus situation in Britain has rapidly moved from the “It’s a lot of fuss about nothing” stage to the panic buying of toilet roll, baked beans and tea bags. Behind all the mockery and sneering about this on social media are real people entering a state of alarm.

The number of positive cases in the UK now stands at 319 and four people have died.  The prime minister today confirmed that the government is preparing to move to the “Delay” phase as containment measures may not be enough. In COBRA meetings this week Boris Johnson was advised that initial “social distancing” measures should be introduced with a week. The government is currently holding off from the more drastic measures such as closing schools and cancelling sporting events.

As the coronavirus spreads, market confidence is shattering. The “Monday Massacre” or “Black Monday”, saw some of the biggest falls in share prices since the 2008 financial crash. Oil prices are hitting the floor. We are falling into a potential political, economic and health crisis all at the same time.

If the situation deteriorates further, the government has a problem on its hands. Yet Brexit, while no longer top of the news agenda, is still the government’s main agenda.

Having seceded from the European Union, negotiations for one of the most important trade and cooperation agreements that Britain will ever negotiate are at an early stage. At the end of the year, the transition period will end, and Britain will be out of the single market and out of the legal and political union with the EU. This is a major change to manage and prepare for in a very short space of time.

If the crisis becomes more severe, the whole British state will kick into action to manage it. The coronavirus will become the government’s top priority as every arm of the state is reconfigured to alleviate the consequences and ride through the storm. In that situation, the government’s ability to manage the Brexit negotiations, conclude an agreement to a tight timescale and prepare for the very significant change in trade and customs arrangement would be badly hindered.

When the transition period ends, if the government achieves its “CETA style” deal, significant trade barriers between the UK and the EU will arise overnight. Goods exported from the UK into the EU will face many more border checks and customs bureaucracy. Lorries heading to the continent will no longer “roll on and roll off”, they will face much greater delays. The UK will be a “third country” and will be treated accordingly.

The government has accepted this as an inevitability of its political choice to leave the single market and customs union and prioritise greater divergence from the EU. This does however mean that there is an enormous amount of preparation required to be ready for when the transition period ends. The British state must be reshaped, and British businesses are scrambling to prepare themselves for the change.

This is already a problematic process, with industry stakeholders tearing their hair out as it is. If the coronavirus outbreak is anything like as severe as it is in Italy, it’s difficult to see how this process will not be badly disrupted. From the building of physical infrastructure, to the development of our own regulatory apparatus to the hiring and training of thousands of customs officials, there is so much to in such little time.

The government must begin considering an extension to the transition period. This arbitrary deadline could increasingly look irresponsible and a matter of warped priorities amidst an unfolding epidemic. An extension would now be in the country’s self-interest as well as giving due consideration to our allies in the EU who are dealing with the same problems.

If the UK and the EU are dealing with a pandemic and the subsequent economic shock, an extension to the transition period would be mutually beneficial. Neither side will be able to afford an unnecessary supply side shock on top of the difficulties Brexit will already bring.

In the face of an epidemic and potential global recession, there will be political space to reluctantly make an unpopular decision. Even the most ardent of Eurosceptics is likely to be pragmatic in response to a sensible decision made in very difficult circumstances. Our EU membership has expired so there is no need to be concerned about Brexit being prevented now.

Politically-speaking, the general public will be far more concerned with the virus than an extension to negotiations with the EU. This wouldn’t be a climbdown by the British government, but a sensible and responsible decision that the EU would be very receptive to.

We’re not there yet but shouldn’t get complacent. The negotiations must be a success for the British economy – this is far more important than meeting a deadline set for political reasons. Events, dear boy, events.