Brexit: Theresa May faces fury from Eurosceptic Tories over lack of 'no deal' planning
Theresa May is facing fury from hardline Eurosceptics after it emerged that planning for a no-deal Brexit in Whitehall has ground to a halt.
Leading Tory Brexiteer Jacob Rees-Mogg said Britain looks "incompetent and weak" if it was not prepared to walk away from negotiations from Brussels if offered unsatisfactory terms.
Planning for the event of a no deal with the EU is "virtually non-existent", according to Whitehall officials quoted in The Financial Times, making it difficult for the prime minister to strengthen Britain's hand in the talks by keeping the threat of a "no deal" on the table.
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UK must 'come fully out' of EU customs union, Boris Johnson says
Philip Hammond, the pro-EU chancellor, earmarked Â£3bn last year to prepare for every outcome of Brexit after coming under fire from Brexiteers for being too slow to commit cash to prepare for if the negotiations collapse.
However Sir Ivan Rogers, a former UK ambassador to the EU, said Brussels had concluded that the UK would not walk away as it was not working âfull tiltâ to develop the independent regulators it would need outside of the EU.
It comes as tensions over Brexit threatened to bubble over between different Tory factions amid a row over future customs arrangements with the EU.
Mr Rees-Mogg, who chairs the European Reform Group of backbench Tories, told The Sun: âPlanning for no deal ought to be an essential part of the negotiations strategy.
âTo show we could easily walk away would worry the EU, strengthening our position and failing to do so would be both incompetent and weak.â
Former Brexit minister David Jones also ramped up the pressure on Ms May by urging her to make it clear that preparations are being made.
"No-deal preparation has been going on for a long time and I think it would be helpful now for the government to make it absolutely clear that this work is being carried out, both for a domestic audience and to show the EU we are not bluffing," he told the Telegraph.
A cabinet source told the newspaper: "The fear among many senior Brexiteers is that we are in no way going to be ready if we end up crashing out without a deal.
"We are staggeringly far behind where we should be."
Pro-EU campaigners said a "no deal" scenario would "cause chaos in our economy" and accused Tory Brexiteers of "beating the drum for inevitable economic ruin".
Labour MP Tulip Siddiq, a supporter of the Best for Britain campaign, said: "Independent forecasts have repeatedly shown that a âno dealâ scenario would cause chaos in our economy and downgrade the rights of our citizens.
"It would represent the kind of capitulation that Mr. Rees-Mogg claims to campaign against, and would produce the very worst outcome from the Brexit process. It will decimate our public services and see household incomes plunge.
"Those supporting it must come clean over the likely consequences of âno dealâ, or they must stop beating the drum for inevitable economic ruin.â
Brexit talks: Top issues facing UK on leaving EU
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Brexit talks: Top issues facing UK on leaving EU
1/7 Customs union
A key point in the negotiations remains Britain's access to, or withdrawal from, the EU customs union. Since the referendum there has been hot debate over the meaning of Brexit: would it entail a full withdrawal from the existing agreement, known as hard Brexit, or the soft version in which we would remain part of a common customs area for most goods, as Turkey does? No 10 has so far insisted that âBrexit means Brexitâ and that Britain will be leaving the customs union, but may be inclined to change its position once the potential risks to the UKâs economic outlook become clearer.
2/7 Northern Ireland-Irish border
Though progress was made last year, there has still been no solid agreement on whether there should be a hard border between Northern Ireland and the Republic of Ireland. To ensure borderless travel on the island, the countries must be in regulatory alignment and therefore adhere to the same rules as the customs union. In December, the Conservative Partyâs coalition partners, the DUP, refused a draft agreement that would place the UK/EU border in the Irish Sea due to its potential to undermine the union. May has promised that would not be the case and has suggested that a âspecific solutionâ would need to be found.
3/7 Transition period
Despite protests from a s mall number of Conservative MPs, the Government and the EU are largely in agreement that a transitional period is needed after Brexit. The talks, however, have reached an impasse. Though May has agreed that the UK will continue to contribute to the EU budget until 2021, the PM wants to be able to select which laws made during this time the UK will have to adhere to. Chief negotiator Michel Barnier (seen here with EU Minister David Davis) has said the UK must adopt all of the laws passed during the transition, without any input from British ministers or MEPs.
4/7 Rights of EU citizens living the UK
The Prime Minister has promised EU citizens already living in the UK the right to live and work here after Brexit, but the rights of those who arrive after Brexit day remains unclear. May insists that t hose who arrive during the transition period should not be allowed to stay, whereas the EU believe the cut-off point should be later.
5/7 Future trade agreement (with the EU)
Despite this being a key issue in negotiations, the Government has yet to lay out exactly what it wants from a trade deal with the EU. Infighting within the Cabinet has prevented a solid position from being reached, with some MPs content that "no deal is better than a bad deal" while others rally behind single market access. The EU has already confirmed that access to the single market would be impossible without the UK remaining in the customs union.
6/7 Future trade agreements (interna tionally)
The Government has already begun trying to woo foreign leaders into prospective trade agreements, with various high profile state visits to China, India and Canada for May, and the now infamous invitation to US President Donald Trump to visit London. However the UK cannot make trade agreements with another country while it is still a member of the EU, and the potential loss of trade with the world's major powers is a source of anxiety for the PM. The EU has said the UK cannot secure trade deals during the transition period.
7/7 Financial services
Banks in the UK will be hit hard regardless of the Brexit outcome. The EU has refused to give British banks passporting rights to trade within the EU, dashing hopes of a special City deal. However according to new reports Germany has suggested allowing trade on the condition that the UK continues paying into the EU budget even after the transition period.
The prime minister's official spokesman dismissed the criticism and insisted the government was actively planning for all Brexit scenarios.
The spokesman told a Westminster briefing: âThe prime minister has said many times, most recently in her Mansion House speech â" we take the issue seriously and a responsible government we continue to plan for a range of scenarios.
âAt the budget the chancellor committed an additional Â£3bn of funding so that departments and the devolved administrations can continue to prepare effectively for all Brexit scenarios, and over Â£1.5bn of this was allocated for 18/19 in the spring statement.
âThatâs in addition to the Â£700m already made available to prepare f or Brexit.â
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