27 May 2018

Financial Times: Britain’s plans for ‘no-deal’ Brexit have ground to a halt

The 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.

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. [...]

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