In Depth

Is the UK ready for no-deal Brexit?

Government asks businesses for advice on how to prepare for no-deal

Ministers have appealed to UK business leaders for ideas on how Whitehall can prepare the economy for a potential no-deal Brexit.

A document sent to 19 leading trade organisations that together represent hundreds of thousands of firms asks for “creative and practical proposals” to “drive businesses’ preparedness” ahead of the 31 October deadline, reports The Times.

The Government has yet to outline how it intends to spend a £108m funding pot put aside to help businesses in the event that Britain crashes out of the EU with no future trade agreement. Instead, at a meeting chaired by Michael Gove last Thursday, industry leaders were asked to submit “readiness proposals”, the newspaper says.

The news comes as Boris Johnson insists business “will be ready” by the Brexit deadline, despite industry warnings that thousands of firms have not submitted the paperwork needed to continue trading with the bloc following a no-deal withdrawal.

The Confederation of British Industry (CBI) warned in July that British companies were not set up for such a scenario – and said their preparations have been “hampered by unclear advice, timelines, cost and complexity”.

The business group also said that neither the UK government nor the EU were adequately prepared.

After carrying out thousands of interviews with UK companies, the CBI reported: “There are no areas of relevance to the economy where the UK, the EU and the business community are all prepared well enough for no deal.”

The group found that larger businesses, particularly in the financial services sector, were more likely to have contingency plans than smaller firms, but added that as a result of poor political leadership, none had been able to plan properly.

Working on a no-deal ‘assumption’

Writing in The Sunday Times in July, Gove – charged by Johnson with planning for a possible no-deal Brexit – said that the Government was working on the “assumption” that the UK would leave the EU without a deal.

The prime minister has set up three no-deal committees to try to ready the country to leave the EU without any future deal for trade or other relations with the bloc.

One of these groups is tasked with providing daily progress briefings in the Cabinet Office’s Cobra briefing room, usually reserved for emergencies such as terrorist attacks, according to The Daily Telegraph. Meanwhile, International Trade Secretary Liz Truss is working on a trade deal with the US.

The Government has also planned the biggest public information campaign since the Second World War, spending as much as £100m on advertising in the next three months alone.

Chancellor Sajid Javid has also promised “significant extra funding” to recruit 500 extra Border Force officers, and has ordered HM Revenue and Customs to make preparations for no-deal its “absolute top priority”.

How prepared are we?

The BBC reported in July that the CBI has found neither the UK nor the EU was ready for a no-deal Brexit.

A government spokesperson hailed the findings as a “constructive contribution”, adding: “Crucially, while there is more to do, the CBI observes that the UK is ahead of the EU in planning for no deal.”

Speaking on BBC Radio 4’s Today programme last month, CBI deputy director Josh Hardie compared the process of preparing for no-deal to damage limitation.

He said: “If you see a storm coming, you put down the sandbags. It doesn’t mean you’re going to stop all the flood water. You’ll probably still lose the kitchen but you might save the bedroom - and that’s where we are right now.”

According to The Times, the CBI report marked a “significant shift in tone”, showing that business leaders were “ready to face up” to the reality of a no-deal Brexit.

Johnson is also urging civil servants to focus on Brexit planning. In a letter sent to all civil servants last week, the PM said that “preparing urgently and rapidly for the possibility of an exit without a deal will be my top priority, and it will be the top priority for the civil service too”.

The BBC reports that government special advisers have received instructions from Johnson’s senior adviser Eddie Lister not to take annual leave until after 31 October.

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