No-Deal Brexit Could Spark Economic Chaos and Force Government To Ship In Emergency Food And Medicines, Cabinet Told

Paul Waugh

Fears that the UK is heading for a no-deal Brexit have dramatically escalated after ministers warned the country could plunge into economic chaos and even need to commission ships to import food and medicines.

David Lidington, who is deputy prime minister in all but name, told colleagues that crashing out of the EU without any agreement would spark a crisis not seen since ‘Black Wednesday’ more than 25 years ago.

During a heated Cabinet meeting on Tuesday, Lidington said that he was the only person around the table who had been an MP on the fateful day in 1992, when interest rates soared in 24 hours as Britain dropped out of the European exchange rate mechanism.

His stark words came as the FT revealed Transport Secretary Chris Grayling stunned colleagues by talking about contingency plans for the government to charter ships to deliver urgent supplies through routes other than Dover-Calais.

Although the PM is still seeking a deal as a ‘priority’, No.10 revealed that ministers agreed to receive weekly updates on preparations for no deal across all Whitehall departments.

John Major and Chancellor Norman Lamont

Two separate Cabinet sources confirmed to HuffPost UK that Lidington had made his ‘Black Wednesday’ warning as fellow ministers appeared to take a less apocalyptic stance, making the case that a no-deal Brexit was manageable.

Lidington is the Chancellor of the Duchy of Lancaster and the man in charge of cross-government policy co-ordination on quitting the EU.

‘Black Wednesday’ caused huge damage to the Tories reputation under John Major which took the party nearly 20 years to recover.

The value of the pound plunged in one day and the UK saw nearly all its gold reserves wiped out, but some Eurosceptics believe that the historic moment began a process of disengagement from the EU that led to Brexit.

Labour’s shadow Brexit minister Jenny Chapman told HuffPost: “If Theresa May tries to take the UK out of the EU without a deal it will be ‘Black Wednesday plus, plus, plus’.

“It will crash the economy, threaten jobs and risk a border in Northern Ireland. Any responsible government would act in the national interest by rejecting a no-deal Brexit and trying to negotiate a deal that protects jobs and the economy.”

During a meeting that lasted nearly two hours on Tuesday, ‘impassioned’ speeches were made by several ministers as the Cabinet divided between those willing to compromise and those taking a more hardline stance.

Pro-Leave ministers also told May they would never tolerate any form of EU plan to treat Northern Ireland differently from the rest of the UK.

The Spectator magazine revealed that Attorney General Geoffrey Cox compared the EU’s proposal to ‘Dante’s first circle of hell’.

With speculation swirling that May could face a leadership challenge, she has in recent days sought to placate Brexiteers in the Cabinet by hardening her stance on Brussels’ plans to avoid a hard border in Northern Ireland, declaring them ’unacceptable”.

Cabinet Office minister David Lidington

The prospect of an irretrievable breakdown in the Brexit talks was further fuelled after a leaked draft of the so-called ‘Withdrawal Agreement’ showed that the EU would insist on retaining its emergency proposals to keep the province tied to European rules.

Brexit Secretary Dominic Raab, Foreign Secretary Jeremy Hunt, Home Secretary Sajid Javid and Attorney General Cox stressed that Northern Ireland could not be linked to the EU indefinitely.

Work and Pensions Secretary Esther McVey and Commons Leader Andrea Leadsom complained about the lack of an end-date in the current plans for a temporary customs plan.

May still hopes that a deal can be done, and a draft agreement leaked to Irish TV channel RTE showed that the EU is taking seriously a plan to give legal force to Britain’s plan to create a UK-wide customs arrangement to avoid the Irish problem.

But the leak also underlined that the EU is insisting on its own ‘insurance’ policy of keeping Northern Ireland subject to customs rules for goods should all other plans fall through.

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