The UK General Election - 4th July 2024


Is the UK prepared for a no-deal Brexit?

PLMR's Alex Cassells discusses whether the UK is prepared for a no-deal Brexit

This week the Government published its first batch of technical notes to advise preparations for a no-deal Brexit scenario. Despite an impressive, reassuring speech from Dominic Raab prior to the publishing of the technical notes, the media attention centred on the Chancellor’s stark warning that no-deal could result in large fiscal consequences of the UK. The Government recently instructed border police to not book annual leave around the Brexit date, implying that there will be a need for more staff around the exit date to handle the disruption likely to be caused. With a no-deal situation seeming increasingly likely, it is worth assessing how prepared the UK is to trade on World Trade Organisation terms based on their recent preparations.

Over the past week newspapers have trailed a range of headlines to warn of the potential outcomes of a no deal scenario, most notably the army delivering food and medicine due to shortages.  Brexiteers are refuting these claims as more ‘project fear’ propaganda from Remainers, but most UK hospital trusts admitted they have not made contingency plans for a no-deal Brexit – seven months before the exit date. Deploying the army to plug the demand gap and assist in the delivery of food and medical supplies in an emergency is therefore actually feasible.

With this reality in mind, the term ‘better late than never’ is an accurate description of the Government’s no deal advice for businesses. The Prime Minister has referenced walking away from the negotiating table for the past two years (as a way of strong arming the EU 27), but it’s becoming clear she did not properly consider the true implications of this until recently, as evidenced by these notes being scrambled together a few months before the UK departs.

By contrast, the EU published its advice notes to businesses months ago, and their advice is vastly more useful to businesses. Unlike the UK – which sought to gloss over concerns highlighted by prominent businesses groups like the CBI – the EU has acknowledged that there is likely to be significant disruption even if negotiations dramatically improve. Additionally, EU member states have begun issuing relief grants to enable businesses to effectively plan for Brexit. For example, the Irish Government has created a ‘Be Prepared Grant’ offering eligible firms €5,000 to pay for services that will develop their Brexit strategy. The UK Government has not offered equivalent grants.

In this time of uncertainty, what will be really telling is how the EU react to the no-deal preparations made by the Government. The release of these technical notes had practical as well as symbolic implications. As well as advising businesses how to plan, they were a show of strength that is willing (and prepared) to go it alone if the EU do not play ball. The coming days will show if the EU heeds this warning.

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