Budget for no deal

The Government’s Brexit policy is to secure a withdrawal agreement and a free trade deal with the EU. It was set out by Theresa May in her Florence speech and has been reiterated many times since. The old mantra of “no deal is better than a bad deal” is heard less and less in Westminster and Whitehall.

Yet unless the EU negotiators think we are serious about walking away without an agreement they have no incentive to show flexibility. This was the lesson of David Cameron’s ill-starred prereferendum efforts to extract concessions that might have swung the campaign his way. If anything, the best chance of achieving a deal is to show we can break away without the calamitous consequences predicted by Remainers. To that end, there needs to be planning for such an eventuality; it needs to be convincing and public.

In the Commons yesterday, when Charlie Elphicke, MP for Dover and Deal, asked for a commitment of £1 billion to be set aside for no-deal preparations, Theresa May said: “We have already made funds available for the preparations and work. We hope we’re going to get that good deal and we’re working to get that good deal.”

But what if we don’t? A report from the Commons Home Affairs Select Committee has raised serious concerns about contingency planning for post-brexit customs operations and fears border disruption unless urgent action is taken, not just here but in France, Belgium and Ireland. If we are to convince the EU that we can go it alone we need to make sure that we are ready to do so and Philip Hammond needs to allocate the necessary money in his Budget. It will be cheaper in the long run.