Preparing Brexit: no deal

With the new prime minister committing to leave by 31 October "no ifs and no buts", and the existing barriers to a deal with the EU remaining unchanged, the prospect of a no-deal exit is rising.

This paper looks at what the prime minister will need to do in the next 94 days to prepare for no deal, and what he will have to do after 31 October if the UK has left the EU without a deal. It argues it could leave very little space for an ambitious domestic agenda.

To be ready for no deal, PM Boris Johnson:

• Must kick-start the government’s no deal preparations immediately – moving thousands of civil servants into operational centres and starting extensive communications to business. Ministers, new in post, should not rip up existing no deal plans and policies.
• Cannot assume the UK – particularly businesses – are ready for no deal (indeed, they may be less ready for no deal in October than in March).
• Must bring in legislation to introduce direct rule in Northern Ireland with immediate effect from 31 October if the executive has not been restored. Other Brexit bills stuck in parliament are not strictly required until after no deal.
• Accept there is no such thing as a ‘managed no deal’ and rely instead on EU unilateral measures.

But the paper argues that a no-deal Brexit would not be a clean break but would dominate government for years to come:

• The union will come under unprecedented pressure – with Northern Ireland most acutely affected by the economic impact and facing major constitutional effects.
• Major showdowns in parliament would continue, on the budget or Queen’s Speech – both due shortly after 31 October.
• It will drain Whitehall’s capacity – at least 16,000 officials will be working on Brexit by the autumn and numbers are likely to rise after no deal.
• The UK would still need a deal with the EU on future trade, but that would be more complex and harder to agree.
• Struggling or failing businesses will look to the government for support.