LONDON: Britain is ramping up preparations for a no-deal Brexit by spending an extra $2.6 billion to make sure the country is ready to leave the European Union with or without a divorce deal at the end of October.
Prime Minister Boris Johnson, who took power last week, has pledged to leave the trading bloc without an agreement in three months unless the EU agrees to renegotiate the deal agreed by his predecessor Theresa May.
Ministers have warned that one of the most hotly contested elements of the divorce agreement — the Irish border backstop — will have to be struck out if there is to be a deal, something the EU has repeatedly said it won’t agree to.
In his first major policy announcement, new finance minister Sajid Javid said the extra money will fund a nationwide advertising campaign, ensure the supply of vital medicines, help Britons living abroad, and improve infrastructure around ports.
“With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready,” Javid said. “We want to get a good deal that abolishes the anti-democratic backstop. But if we can’t get a good deal, we’ll have to leave without one.”
Wrenching the United Kingdom out of the EU without a deal means there would be no formal transition arrangement to cover everything from post-Brexit pet passports to customs arrangements on the Northern Irish border.
Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain into a recession, roil financial markets and weaken London’s position as the pre-eminent international financial center.
Supporters of Brexit say that while there would be some short-term difficulties, the disruption of a no-deal Brexit has been overplayed and that in the long-term, the United Kingdom would thrive if it left the European Union.
The finance ministry said the new money will “turbo-charge” no-deal preparations. Among other initiatives, 434 million pounds will be spent to ensure vital supplies of medicines and medical products can be brought into the country, including hiring additional freight capacity, warehousing and stockpiling.
To get people and businesses ready for a no-deal Brexit, 138 million pounds will be spent on one of the biggest peacetime advertising campaigns and provide extra consular support for citizens living overseas.
A total of $416.9 million will be spent on new border and customs operations, including hiring an extra 500 border force officers and doubling the support for customs agents to help companies fill in customs declarations.
The finance ministry also said a further $1.21 billion will be available for government departments and the devolved administrations in Scotland, Wales and Northern Ireland to improve their readiness.
This means the government has in total allocated $7.6 billion to prepare for a no-deal exit, including $5 billion of funding for this financial year.
Javid’s predecessor Philip Hammond, who opposed leaving the EU without a divorce deal, was accused by Brexit supporters of failing to spend enough money to get Britain ready for a no-deal Brexit, undermining its negotiating position with Brussels.
The main opposition Labour party branded the spending an “appalling waste of tax-payers’ cash” because the majority of lawmakers in parliament had made clear their intention to block an exit without a withdrawal agreement.
“This government could have ruled out no deal, and spent these billions on our schools, hospitals, and people,” said John McDonnell, the party’s finance chief.
Chief Secretary to the Treasury Rishi Sunak said more detail on the government’s spending plans would be given at a spending review and fiscal event later in the autumn.