UK Government Prepares for Brexit ‘No Deal’

The government has ordered ministers to negotiate a Brexit “transition period” for the eventuality that trade talks fail and the country leaves the European Union (EU) without a trade deal.

Whitehall sources believe the EU will want to avoid the UK leaving suddenly in March 2019, possibly damaging their economy and leaving an £8 billion hole in their budget, The Times reports.

Philip Hammond, the chancellor, has also confirmed that the government is preparing for a range of different outcomes should trade talks break down.

In guidelines published last month, the EU said that any transition would last around 18 months and would require Britain to comply with the bloc’s trade and customs rules, as well as accept the jurisdiction of the European Court of Justice.

It is not yet clear if the UK would be able to strike trade deals with non-EU nations or if it will be forced to accept new EU laws in the proposed period.

David Davis’s department for exiting the EU is to hand a series of Brexit delivery plans to government mandarins this month. They will then compile monthly “progress reports” to check civil servants are moving fast enough on Brexit planning.

A Whitehall source told The Telegraph: “In the New Year the Government is moving from a planning phase to a delivery phase. We will be removing the excuses some departments have for not being ready.

“The intention is to ensure we are ready to deliver Brexit whatever is negotiated in Brussels, and while the chance of a ‘no deal’ scenario has fallen, we will still be prepared.”

In November, the European Commission’s Directorate-General for Regional and Urban Policy (DG Regio) produced a “worst-case scenario” report which suggested that, if Britain’s money is not replaced, regional aid for Western European member-states could be terminated entirely.

An earlier European Parliament report suggested a that “No Deal” Brexit would leave a €10.2-billion hole in the EU’s’s annual budget.