£2bn no-deal funding announced as Government sends message to Brussels

A £2.1 billion funding boost for no-deal Brexit preparations is part of the Government’s plan to show Brussels that it will not be “business as usual” in dealing with the UK.

Chancellor Sajid Javid announced the funding package, including £1.1 billion already committed to plans for October 31 and £1 billion in reserve, saying it is “vital that we intensify our planning” for the Brexit deadline.

Commons Leader Jacob Rees-Mogg said Boris Johnson would not be “browbeaten” by Brussels and the European Union must realise the UK was not “frightened” of leaving.

The moves came as Bank of England governor Mark Carney warned a no-deal Brexit would be an “instantaneous shock” on the economy and cautioned the pound would fall, inflation would rise and GDP would slow.

The Bank has slashed its growth forecast to 1.3% for both this year and next, down from the 1.5% and the 1.6% previously predicted.

The Prime Minister will chair his first meeting of the Brexit war cabinet – comprising the Chancellor, Foreign Secretary Dominic Raab, Chancellor of the Duchy of Lancaster Michael Gove, Brexit Secretary Steve Barclay and Attorney General Geoffrey Cox – on Thursday.

The group – formally known as the Exit Strategy committee or XS – had its first meeting on Monday, which was led by Mr Gove, the Government’s no-deal planning supremo, as the Prime Minister was in Scotland.

Mr Javid said the £2.1 billion funding injection will ensure the UK is ready to leave the European Union “deal or no deal”.

However, Labour’s shadow chancellor, John McDonnell, called it an “appalling waste of taxpayers’ cash” and the Commons Public Accounts Committee is likely to scrutinise the funding.

Measures include:

– £344 million for border and customs operations

– £434 million to ensure vital medicines are available

– £108 million to support businesses

– £138 million for a public information campaign to begin in the “near future”

The funding will pay for 500 more Border Force officers, support for passport processing, improved infrastructure at ports and extra cash for Operation Brock – the plan to cope with traffic chaos in Kent.

Supplies of medicines could be hit by disruption in the event of a no-deal Brexit, so mitigation plans include increased freight capacity, warehousing and stockpiling.

Mr Javid said: “This additional £2.1 billion will ensure we are ready to leave on October 31 – deal or no deal.”

In total the Treasury has made £6.3 billion available to prepare for Brexit including £4.2 billion this financial year alone.

Mr Johnson has ordered planning for a no-deal Brexit to be ramped up, even though he has claimed the odds of it happening are a “million to one against”.

The Prime Minister sent his top Europe adviser David Frost to Brussels to deliver his message that the UK will be leaving on October 31 “whatever the circumstances”.

And Commons Leader Mr Rees-Mogg said Brussels needed to understand the difference in approach under the new Prime Minister.

Speaking on his ConservativeHome podcast he said: “The new Prime Minister is somebody of considerable force of personality who is not going to be browbeaten by them.”

The appointment of Vote Leave mastermind Dominic Cummings as Mr Johnson’s senior aide was an “exceptionally important” statement, he added.

“That ought to make the EU realise that it is not business as usual. It isn’t a sort of wet establishment that will go along with Brino (Brexit in name only).

“It is a tough-minded, clear-sighted Government that will accept a decent deal, a fair deal, but will not accept a bad deal and isn’t frightened of leaving.”

Critics tore into the commitment to spend billions on no-deal preparations.

Public Accounts Committee (PAC) chairwoman Meg Hillier told PA: “The Prime Minister is carrying out megaphone diplomacy with Brussels and using taxpayers’ money to fund it.

“Being on a war cabinet footing and making breathless announcements of spending at pace is a long way from delivering anything meaningful at the front line.

“A lot of this money will have already been committed. But it’s practically impossible to recruit, train and deploy Border Force staff in 91 days.

“The PAC will continue to look beyond the bluster at the facts, the delivery and follow how taxpayers money is spent. We’ll also be probing how much of this is new funding rather than the release of previously earmarked funding.”

The SNP’s Europe spokesman Stephen Gethins described the cash as a “”shameful waste of money” and “rather than working to avert a catastrophic no-deal exit, Boris Johnson is accelerating over the economic cliff-edge”.

Liberal Democrat leader Jo Swinson said the Government was having to spend money on protecting supplies of medicines rather than investing in services “all because they are choosing to pursue no deal”.

The European Commission said that in meetings between Mr Frost and EU officials both sides reiterated their positions.

Asked if the UK put forward any ideas to break the deadlock, commission spokeswoman Mina Andreeva said: “This question is best addressed to the UK authorities, if they have other proposals in mind.”

She said commission president Jean-Claude Juncker and Mr Johnson would have the chance to meet at the G7 summit in Biarritz later this month.