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Fresh no-deal Brexit proposals set to spark cabinet clash

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Fresh no-deal Brexit proposals set to spark cabinet clash

UK trade

Fresh no-deal Brexit proposals set to spark cabinet clash

Brexit secretary seeks to ramp up preparations for abrupt exit before October 31

Brexit secretary Stephen Barclay faces opposition from Europhile colleagues © Bloomberg

The UK Brexit secretary is preparing a paper on whether to step up planning in case the country leaves the EU without a deal ahead of its scheduled departure date of October 31, in a move that is expected to trigger a clash among cabinet ministers.

Steve Barclay, who backed Leave in the 2016 referendum, is among Eurosceptic Tory MPs who believe it would be prudent for the government to ramp up preparations for an abrupt departure. Government officials said the minister is expected to present his proposals at the cabinet meeting on Tuesday.

He faces a pushback from Europhile colleagues, including business secretary Greg Clark, who believe it was a mistake for the government to ever consider a no-deal Brexit. A majority of MPs have signalled that they would try to block an exit without an agreement with Brussels in all circumstances.

“The dilemma is whether to ramp up or ramp down,” said one political aide. Another said the issue was shaping up to be a “major totemic battle”.

Eurosceptic Tory ministers believe the threat of a no-deal Brexit gives Britain more leverage in any future negotiations with Brussels.

At the same time they also calculate that the EU could refuse a further extension of Article 50, the mechanism for leaving the bloc, in the autumn. “Steve Barclay’s view is that you can’t stop preparing for it even if it’s unlikely,” said one ally. “His view is that it would be responsible for the government to prepare.”

Mr Barclay will either present his paper at cabinet next Tuesday or a week later, according to Whitehall figures.

Stepping up the no-deal exit preparations could mean once again striking a deal with ferry companies to provide contingency capacity across the English Channel. That planning, which was cancelled after April’s delay, has already cost the Department for Transport £83m, including £33m of compensation to Eurotunnel, which runs trains through the Channel tunnel.

Downing Street was unable to say precisely how much money Whitehall has spent on no-deal planning, saying only that £2bn of the £4bn earmarked for Brexit overall had been spent so far.

Other elements of no-deal planning, dubbed Operation Yellowhammer, have included the National Health Service chartering a plane to fly in medical supplies from The Netherlands, preparing Manston airport in Kent as a holding area for trucks to prevent Channel port traffic jams, and precautions to ensure medicines and blood products would still meet EU testing requirements.

The question of no-deal planning has been barely discussed at cabinet meetings since April, when Theresa May, the prime minister, dramatically agreed to push Brexit back by six months.

Mr Barclay briefly raised the issue at this week’s cabinet, urging Mrs May to order civil servants to step up contingency preparations once again. That view is shared by Eurosceptic cabinet ministers including Liam Fox, Penny Mordaunt, Chris Grayling and Andrea Leadsom.

But that call was met by resistance from Mr Clark and other pro-EU cabinet ministers. Philip Hammond, the chancellor, is understood to be cautious about the prospect of the Treasury providing more money for no-deal preparations.

“We should always still continue to be ready if it came to it and have plans in place, but Greg Clark continues to believe that no deal is not an option and there is no parliamentary majority for no deal Brexit,” said one ally of the business secretary.

If the UK left the EU without a deal, a position advocated by Nigel Farage’s new Brexit party, it would operate on the basis of tariff rules set by the World Trade Organisation. Brexiters believe that higher tariffs with the EU would be offset by the ability to cut tariffs on goods traded with other countries elsewhere.

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