(Bloomberg) -- The U.K. government doubled spending on no-deal Brexit preparation in the latest sign new Prime Minister Boris Johnson is serious about leaving the European Union -- with or without a divorce deal -- Oct. 31.
Chancellor of the Exchequer Sajid Javid set aside 2.1 billion pounds ($2.5 billion) of new cash including an immediate 1.1 billion pounds to improve key border and customs infrastructure and ensure access to critical medical supplies, the Treasury said in an emailed statement Wednesday. The remainder will be made available to government departments if needed.
The new funding doubles the amount made available for no-deal Brexit planning this financial year to 4.2 billion pounds, and brings the total cash allocated to 6.3 billion pounds. It’s designed to show Johnson is putting his money where his mouth is when it comes to preparing for the possibility of the U.K crashing out of the European Union in three months’ time.
We’re Getting an Idea of Boris Johnson’s Plan A: Deal, Then Election
Johnson has made leaving the EU “do or die” by Halloween the central pledge of his premiership since taking office July 24. That’s triggered a slump in the pound as he hinted he may not even hold further negotiations with the EU to try to secure a smooth exit. But he’s shown no signs of backing down, and has instructed government departments to ensure they’re ready for a no-deal split.
“If we can’t get a good deal, we’ll have to leave without one,” Javid said in the statement. “It’s vital that we intensify our planning to ensure we are ready.”
The new funding includes:
- 344 million pounds to prepare new border and customs operations
- 434 million pounds to ensure supply of vital medicines and medical products, including through freight capacity and stockpiling
- 108 million pounds to support businesses
- 138 million pounds for a public communications campaign
On Wednesday, the main opposition Labour Party accused the government of squandering money, while the Liberal Democrats called the expenditure a "drop in the ocean" compared with previous Treasury estimates that the U.K. economy would suffer at least a 90 billion-pound hit if it leaves the EU without an agreement.
‘Increasing the Pace’
“This is an appalling waste of tax-payers’ cash, all for the sake of Boris Johnson’s drive towards a totally avoidable no deal,” Labour’s Shadow Chancellor, John McDonnell, said in an emailed statement. “This government could have ruled out no deal, and spent these billions on our schools, hospitals, and people.”
On Wednesday, Business Secretary Andrea Leadsom met with U.K. executives, including representatives of General Electric (NYSE:GE), BAE Systems (LON:BAES) and Tate and Lyle Sugars. She said her top priority is to help businesses of all sizes prepare for Britain’s departure from the bloc.
“While there are challenges, business leaders were optimistic and clear that none are insurmountable,” Leadsom said in a statement. “We are stepping up a gear and increasing the pace of our preparations.”
Other companies represented included JML Group, Laing O’Rourke, Scottish Power, Ineos, and JD Wetherspoon, whose chairman, Tim Martin, campaigned for Leave in the 2016 referendum. Leadsom is due to meet with business organizations on Thursday.
