Britain’s plans for ‘no-deal’ Brexit have ground to a halt
Lack of preparations weakens May’s threat to walk out of talks
he UK government’s preparations for a “no deal” Brexit in March 2019 have largely ground to a halt, making it almost impossible for Theresa May to walk out of negotiations with the EU in the next 10 months, according to people with close knowledge of the situation.
As the prime minister prepares for what is arguably the trickiest phase of the Brexit talks, the government’s official position is that it is confident it can reach an accord with the EU — but that it is also preparing contingencies for “no deal” if Brussels tries to strike too hard a bargain.
However, Whitehall officials are privately conceding that preparations for a “cliff edge” Brexit next March are nowhere near the level they need to be if a threat by Mrs May to walk away from the talks were to be credible.
“Our preparedness for no deal is virtually non-existent,” said one senior British official working on Brexit. “Our ability to deliver a ‘no deal’ outcome recedes with every week that passes.”
Other officials preparing for the possibility of Britain leaving the EU without a deal say they are being discouraged from taking on projects that might only be needed should there be no agreement on customs and regulatory co-operation by next March.
Sir Ivan Rogers, the UK’s former ambassador to the EU, observed in a speech in Glasgow last week that the UK had still not set up the independent regulatory bodies that would be needed in the event of a “no deal” Brexit next year.
“If we want . . . genuinely to go it alone . . . then we have to be going full tilt in developing that regulatory capability at huge speed,” he said. “The fact that, in so many areas, we are obviously not doing that . . . is yet another reason why the EU side has long since concluded that the UK would not walk out.”
Another former mandarin indicated that the failure to set up independent regulatory bodies in the event of a no deal next year was causing most concern.
“How many years does it take to set up a medicines agency?” he said. “Or chemicals approval? Or civil nuclear-safety standards? Or a new state aid policy? Where is the legislation? Where are the skilled staff coming from?”
In last December’s Budget, Philip Hammond, the chancellor, allocated £1.5bn for “Brexit preparedness”, which covers all aspects of Brexit planning, including a “no deal” scenario.”
However, government officials concede that the new money only became available in the financial year starting in April and that it is still too early to make a judgment on how it might be spent.
A further £1.5bn has been set aside by Mr Hammond but this is only being earmarked for the financial year after March 2019 when the UK is formally due to leave the EU.
On Sunday, Jacob Rees-Mogg, the leading Conservative Brexiter, urged Mrs May to revive her threat to leave the EU without a deal if Brussels takes an uncompromising approach in the Brexit negotiations.
He told the BBC that Mrs May should threaten not to pay the £40bn “divorce bill” agreed with the EU in December. “We should say quite clearly: ‘If we don’t get the trade deal we want, you don’t get the money.’ That’s a very strong negotiating position.”
But hardline Brexiters, both in cabinet and on the Conservative backbenches, claim that Mrs May, Mr Hammond, cabinet secretary Sir Jeremy Heywood and Olly Robbins, the chief Brexit negotiator, have conspired to avoid serious “no deal” planning for next March to such an extent that it is no longer a realistic option.
Dominic Cummings, one of the masterminds of the pro-Brexit referendum campaign, wrote last week: “The Treasury argues . . . that given the actual outcome of the negotiations will be abject surrender, it is pointless wasting more money to prepare for a policy that has no future and therefore even the Potemkin preparations now under way should be abandoned.”
A Number 10 spokesman said: “The prime minister is committed to getting the best possible Brexit deal, one that works for the UK and the EU. The government is committing extensive resources as part of our preparations for leaving the EU — whether in the event of a deal or not, and at the autumn Budget the chancellor allocated £3bn specifically for our exit preparations.”