An extra £2.1 billion has been announced to help the country prepare for a no-deal Brexit, the Government has revealed, more than doubling the amount it has already set aside this year.
Chancellor Sajid Javid's funding announcement comes as Prime Minister Boris Johnson prepares to chair his first exit strategy meeting.
The funding includes £1.1 billion for departments and the devolved administrations to spend immediately, with a further £1 billion in reserve, Mr Javid said.
The extra money comes as the Bank of England downgraded its growth forecast for both 2019 and 2020 to 1.3%, but raised the outlook for 2021 to 2.3%.
The Bank of England's Monetary Policy Committee voted unanimously in favour of maintaining the 0.75% interest rate.
The pledge for extra Brexit funding, brings the total amount of money set aside to prepare for Brexit to £6.3 billion, after former chancellor Philip Hammond allocated £4.2 billion since 2016.
Mr Javid said the extra money will ensure the UK is ready to leave the European Union “deal or no-deal”.
The £2.1 billion announced by Mr Javid will include:
- £344 million for border and customs operations, including 500 new Border Force officers, support for passport processing, improved infrastructure at ports and extra cash for Operation Brock – the plan to cope with traffic chaos in Kent
- £434 million to ensure vital medicines are available, including mitigation plans for increased freight capacity, warehousing and stockpiling
- £108 million to support businesses
- £138 million for a public information campaign, information for Britons living abroad and support for areas including Northern Ireland
The chancellor said: "We had already allocated some £4.2 billion for the EU exit...so a lot of the work was already going on, but what we needed to do is turbo-charge it, to make sure we are probably, genuinely read on October 31st."
Labour attacked the spending plans, calling them an “appalling waste of tax-payers’ cash”.
Shadow chancellor John McDonnell said the extra funding was "all for the sake of Boris Johnson’s drive towards a totally avoidable no-deal.
“This government could have ruled out no-deal and spent these billions on our schools, hospitals and people.
“Labour is a party for the whole of the UK, so we’ll do all we can to block a no-deal, crash-out Brexit – and we’ll deliver a transformative economic policy that delivers for the many, not the few.”
Mr Javid’s announcement, soon after entering the Treasury under Mr Johnson, will be seen as a break from Philip Hammond’s era.
The former chancellor was accused by Brexiteers of being reluctant to release cash to prepare for a no-deal exit.
“It really represents a shift in tone for the Treasury as a department,” a Whitehall source said.
“All departments that asked for money for no-deal got it, this was a very expedited process.”
Mr Javid's extra £2.1 billion announcement has doubled the amount made available this year for Brexit preparations, making the 2019 total £4.2 billion of pledged funding.
Mr Javid said that while the Government wants to leave the UK with a deal, the extra funding will help ensure the UK is ready to leave with no-deal, if a new agreement cannot be reached.
“With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready," Mr Javid said.
“We want to get a good deal that abolishes the anti-democratic backstop, but if we can’t get a good deal, we’ll have to leave without one.
“This additional £2.1 billion will ensure we are ready to leave on October 31 – deal or no-deal.”
ITV News Business Editor Joel Hills said that the Government hopes that its planning for a no-deal Brexit will "force the EU into agreeing a new deal" over fears that the UK really will leave the bloc with no-deal.
He added that he had contacted the Treasury, the Cabinet Office, and the Department for Exiting the EU about how much of the Brexit preparation money has been spent of no-deal planning and what it has bought, but "no one" was "able" to tell him.
The Chancellor's announcement comes amid Mr Johnson's orders that planning for a no-deal Brexit be ramped up, even though he has claimed the odds of it happening are a “million to one against”.
On Thursday, Mr Johnson will chair a meeting of the XS (exit strategy) committee after the Chancellor of the Duchy of Lancaster Michael Gove chaired the first meeting on Monday.
The Prime Minister sent his top Europe adviser David Frost to Brussels to deliver his message that the UK will be leaving on October 31 “whatever the circumstances”.