No Deal Brexit now 'assumed' and government could borrow to fund it


The Government is “operating on the assumption” that Britain will leave the EU without a deal on October 31 according to Michael Gove.

The new Chancellor of the Duchy of Lancaster, who is in charge of no-deal preparations in the Cabinet Office, said there was a “very real prospect” that an agreement would not be struck with Brussels before the Halloween deadline.

Meanwhile treasury minister Rushi Sunak said the new PM was “turbocharging” preparations for no deal – and the government was prepared to borrow more to fund preparations.

Boris Johnson will this week announce a massive multi-billion boost for No Deal planning – even though he said there was a “million to one” chance of it happening.

The previous Government had already allocated more than £4bn on getting the country ready for  a chaotic departure.

Boris Johnson and his new cabinet

 

This week the new PM will unveil a massive publicity campaign to make sure businesses and individuals are prepared.

But former Chancellor Philip Hammond has warned against squandering any extra money in public coffers.

Meanwhile its understood that a cross-party group of MPs are already plotting how to prevent one.

Mr Hammond is believed to have spoken to Shadow Brexit Secretary Keir Starmer who told the Observer: “The political direction of travel under Boris Johnson is clear and so it is more important than ever that we build a strong crossparty alliance to stop a no-deal Brexit.

“That work will intensify over the summer, before parliament resumes in September.”

Sunak, who was appointed as Chief Secretary to the Treasury in the reshuffle, said Sajid Javid would be setting out more details on ‘no deal’ spending plans this week.

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He insisted there was “fiscal headroom”, an amount of extra borrowing possible without breaking a budget deficit cap of 2% of GDP introduced by former finance minister Philip Hammond.

Asked where the money would come from, Sunak told Sky News: “We can afford this and the reason we can afford this is there has been some very careful management of the economy, there is 26.6 billion pounds of fiscal headroom next year.”

He insisted it was “not a blank cheque” for spending but that Britain could afford to borrow more.

Leading Brexit supporter Michael Gove , who Johnson has put in charge of ‘no deal’ preparations, wrote in the Sunday Times newspaper that the government would undertake “intensive efforts” to secure a better deal from the EU.

“We still hope they will change their minds, but we must operate on the assumption that they will not … No deal is now a very real prospect and we must make sure that we are ready,” Gove wrote.

“Planning for no deal is now this government’s no. 1 priority,” he said, adding “every penny needed” for no deal preparations would be made available.

Gove said the government would be launching “one of the biggest peacetime public information campaigns this country has seen” to get people and businesses ready for a ‘no deal’ exit.

Prime Minister Boris Johnson

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The Sunday Times reported that Dominic Cummings, the mastermind behind the 2016 referendum campaign to leave the EU and now a senior aide to Johnson, told a meeting of the prime minister’s advisers that he had been tasked with delivering Brexit “by any means necessary”.

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Johnson has set up a “war cabinet” of six senior ministers to make decisions on Brexit and is preparing for a no-deal emergency budget in the week of Oct. 7, the newspaper added.

Writing in the Sunday Telegraph, new finance minister Sajid Javid said: “In my first day in office … I tasked officials to urgently identify where more money needs to be invested to get Britain fully ready to leave on October 31 – deal or no deal.

“And next week I will be announcing significant extra funding to do just that.”

It came as French former Europe minister Nathalie Louseau warmed UK would be diminished by leaving without a deal. She said: “We have heard the good speeches, but no detail.

“I would like to be optimistic… but it’s not about campaigning and political speeches. It’s about a huge amount of work been done by negotiators on both sides and we should trust them.” She added: “It is not a question of
character.

“We will not change our minds because you have changed your Prime Minister… It’s about time to get serious.”





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