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Johnson Doubles U.K.’s Spending on No-Deal Brexit Preparation

By Bloomberg 1 August 2019
Caption
LONDON, ENGLAND - JUNE 11: EU and Union Jack flags are waved as anti-Brexit demonstrators gather outside the Houses of Parliament on June 11, 2018 in London, England. The EU withdrawal bill returns to the House of Commons tomorrow for the first of two sessions in which MP's will consider amendments imposed by the Lords, and another set of fresh amendments. (Photo by Dan Kitwood/Getty Images)

(Bloomberg) --The U.K. government doubled spending on no-deal Brexit preparation in the latest sign new Prime Minister Boris Johnson is serious about leaving the European Union -- with or without a divorce deal -- Oct. 31.

The new funding doubles the amount made available for no-deal Brexit planning this financial year to 4.2 billion pounds, and brings the total cash allocated to 6.3 billion pounds. It’s designed to show Johnson is putting his money where his mouth is when it comes to preparing for the possibility of the U.K crashing out of the European Union in three months’ time.

We’re Getting an Idea of Boris Johnson’s Plan A: Deal, Then Election

Johnson has made leaving the EU “do or die” by Halloween the central pledge of his premiership since taking office July 24. That’s triggered a slump in the pound as he hinted he may not even hold further negotiations with the EU to try to secure a smooth exit. But he’s shown no signs of backing down, and has instructed government departments to ensure they’re ready for a no-deal split.

“If we can’t get a good deal, we’ll have to leave without one,” Javid said in the statement. “It’s vital that we intensify our planning to ensure we are ready.”

The new funding includes:

344 million pounds to prepare new border and customs operations
434 million pounds to ensure supply of vital medicines and medical products, including through freight capacity and stockpiling
108 million pounds to support businesses
138 million pounds for a public communications campaign
Hardline Brexiteers frequently accused Javid’s predecessor, Philip Hammond, of preventing the government from sufficiently preparing for a no-deal Brexit because of his opposition to that outcome — even though 4.2 billion pounds were allocated for that scenario on his watch.

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On Wednesday, the main opposition Labour Party accused the government of squandering money, while the Liberal Democrats called the expenditure a “drop in the ocean” compared with previous Treasury estimates that the U.K. economy would suffer at least a 90 billion-pound hit if it leaves the EU without an agreement.

‘Increasing the Pace’
“This is an appalling waste of tax-payers’ cash, all for the sake of Boris Johnson’s drive towards a totally avoidable no deal,” Labour’s Shadow Chancellor, John McDonnell, said in an emailed statement. “This government could have ruled out no deal, and spent these billions on our schools, hospitals, and people.”

On Wednesday, Business Secretary Andrea Leadsom met with U.K. executives, including representatives of General Electric, BAE Systems and Tate and Lyle Sugars. She said her top priority is to help businesses of all sizes prepare for Britain’s departure from the bloc.

“While there are challenges, business leaders were optimistic and clear that none are insurmountable,” Leadsom said in a statement. “We are stepping up a gear and increasing the pace of our preparations.”

Other companies represented included JML Group, Laing O’Rourke, Scottish Power, Ineos, and JD Wetherspoon, whose chairman, Tim Martin, campaigned for Leave in the 2016 referendum. Leadsom is due to meet with business organizations on Thursday.

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