The British government announced Wednesday that it would spend an additional $2.4 billion on preparing to leave the European Union, bringing the total spent so far on Brexit readiness to more than $10 billion.  

The extra investment comes as a coalition of opposition lawmakers attempts this week to pass legislation blocking a so-called no-deal Brexit, warning of catastrophic consequences for the British economy if it leaves the bloc without a withdrawal agreement. 

The European Union is also stepping up its preparations for a potential no-deal Brexit, announcing Wednesday that it would release money to help member states from a fund normally reserved for natural disasters.  

“In order to be fully ready for an eventual no-deal Brexit we have made the necessary legislative proposals. Better safe than sorry,” said European Commission spokeswoman Mina Andreeva. 

Separately, researchers from the “UK in a Changing Europe” program at Kings College London said in a new report that a prolonged period of political uncertainty would follow a no-deal Brexit, as a new relationship with the EU will have to be agreed to.  
 


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Warnings of Brexit Chaos as Britain, EU Step Up No-Deal Preparations

The report warned there would also be a big impact on trade, especially at bottlenecks like Dover. Ten thousand trucks pass through the port there on a busy day. The port is Britain’s major link with the European mainland. Cargo includes anything from car parts to fresh fruit, livestock and critical medicine.  
 
Most goods pass through unchecked and tariff-free thanks to Britain’s membership in the European Customs Union and Single Market. A no-deal Brexit would result in half of all British exports facing disruption, said report co-author professor Anand Menon. 
 

Anti-Brexit and anti-Boris Johnson messages are projected onto the Angel of the North sculpture in Gateshead, England, Sept. 3, 2019, in this picture obtained from social media on Sept. 4, 2019.

“One of the things no-deal means apart from tariffs, which are relatively unimportant, actually, is the fact that goods are going to have to be checked,” Menon said. “And these companies work to very tight schedules. They don’t store parts; they work on the basis of one-hour turnaround times for these parts. If you suddenly start getting delays, their whole business model will be called into question.” 
 
They include auto companies like Nissan, Honda and Ford; and Airbus, which makes its aircraft wings in Britain. Companies like those generate hundreds of thousands of jobs. 
 
The report also warned that a plunging currency would most likely bring rising prices and possible shortages of some fresh food.  

The British government dismisses such claims and says it will be ready for a no-deal exit.  Chancellor of the Exchequer Sajid Javid told lawmakers Wednesday, in announcing the extra $2.4 billion for Brexit preparations, that the money would mean “more border force staff, it means more transport infrastructure at our ports, and more support for business readiness.” 
 
‘Mutual recriminations’

The chancellor added that Britain would be able to strike a free-trade agreement with Europe after a no-deal Brexit. That won’t be so easy, warned analyst Menon.  
 
“Once we’ve had no deal, you’ll get mutual recriminations on both sides of the [English] Channel, because there will be economic damage on both sides of the channel,” he said. “So under those circumstances, politically, it might be difficult for both sides to sit at a table in a good-natured, trusting way and start to negotiate.” 

A pro-Brexit protester carries signs outside the Houses of Parliament in London, Sept. 4, 2019.

U.S. President Donald Trump has promised a trade deal with Britain after Brexit, saying the transatlantic allies could do “four or five” times more trade. It won’t make up for the shortfall, Menon said. 

“If we remove every single tariff on trade with the United States, it would amount to a gain of about 0.4 percent of GDP,” he said. “A no-deal Brexit would damage the economy over the next 10 years to the tune of 8 to 10 percent of GDP by conservative estimates, so no comparison, really. The Americans won’t do a trade deal intended to benefit Britain. They’ll do a trade deal intended to benefit the United States.” 
 
Britain and the EU both say they want a Brexit deal. But with political paralysis in Britain and time running out fast, such an agreement seems unlikely before the Oct. 31 Brexit deadline.  
Unless the deadlock can be broken in Parliament, analysts warn, the chaos of a no-deal Brexit is just weeks away. 

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