Gove and Javid announce no-deal Brexit now ‘assumed’ by government

The government is now “working on the assumption” of a no-deal Brexit, Michael Gove has said.

Mr Gove said his team still aimed to come to an agreement with Brussels but, writing in the Sunday Times, he added: “No deal is now a very real prospect.”

The prime minister has made Mr Gove responsible for preparing for no-deal.

Treasury sources say they expect more than £1bn of extra funding to be made available later this week for no-deal planning and preparation.

Writing in the Sunday Telegraph, Chancellor Sajid Javid said there would be “significant extra funding” for 500 new Border Force officers and “possible” improved infrastructure at British ports.

Prime Minister Boris Johnson has told Mr Gove to chair no-deal meetings seven days a week until Brexit is delivered, according to the Sunday Times.

Mr Gove said tweaks to Theresa May’s withdrawal agreement – which was approved by the EU but resoundingly rejected by Parliament – would not be enough.

“You can’t just reheat the dish that’s been sent back and expect that will make it more palatable,” he wrote.

He added he hoped EU leaders might yet open up to the idea of striking a new deal, “but we must operate on the assumption that they will not”.

“While we are optimistic about the future, we are realistic about the need to plan for every eventuality.”

Mr Gove highlighted a major flaw of Mrs May’s deal as the Irish backstop plan – a measure designed to prevent the introduction of a hard border on the island of Ireland.

So far the backstop has proved a sticking point in the Brexit negotiations.

A no-deal Brexit would mean the UK leaving the EU and cutting ties immediately, with no agreement in place.

The UK would follow World Trade Organization rules if it wanted to trade with the EU and other countries, while also trying to negotiate free-trade deals.

But with Britain outside the EU, there could be physical checkpoints to monitor people and goods crossing in and out of the UK.

No-confidence vote

Speaking to Sky’s Sophy Ridge, Labour leader Jeremy Corbyn said he would do everything to prevent a no-deal Brexit.

He reiterated his call for a new referendum – insisting he would still hold one if Labour were in power – and said, in the event of a no-deal Brexit, Labour would campaign to remain in the EU.

Mr Corbyn also said he would look at whether to call a no-confidence vote in the government after Parliament returns in September.

Liberal Democrat leader Jo Swinson told Sky that, in the event of a general election, her party’s message would be: “Stop Brexit, stop Boris and start renewing our country.”

Mr Gove is one of several new ministers pressing on with Brexit preparations since joining Mr Johnson’s cabinet earlier this week.

Newly appointed Chief Secretary to the Treasury, Rishi Sunak, told Sky: “We’re turbo-charging preparations for no-deal, that is now the government’s number one priority.”

He said if the EU would not reopen discussions about the Irish backstop plan then “it’s right that we prepare properly, with conviction, and importantly with the financial resources that the Treasury will now supply properly”.

Labour set to end local council outsourcing contracts

Shares in Britain’s government and public services contractors are in the spotlight today after the Labour Party pledged to extend commitments to renationalise the privatised sector.

All the major stocks in the outsourcing sector have been under pressure over the past half-decade, with the likes of Capita, Serco, Babcock, Kier and Mitie trading at a fraction of where they were, while Carillion went bust and Interserve was only saved in a debt-for-equity investor wipeout.

At the weekend Labour said it would bring in legislation, a Local Public Services Act, to force councils into insourcing, or bringing the delivery of public services back in-house and directly employing their own staff. It is understood John McDonnell, the shadow chancellor and architect of what he called an “insourcing revolution”, wants to extend that to government departments.

Outsourcing of public services was introduced during Margaret Thatcher’s reforms to roll back state control.

Announcing Labour’s new policy, Mr McDonnell said that outsourcing had led to “massive failures in service delivery as we saw with the collapse of Carillion. People have had enough and want their services back.”

However, Matthew Fell of the CBI said: “Rejecting the innovation, investment and cost savings suppliers can bring to vital public services and infrastructure is an extreme move, devoid of evidence yet dripping in dogma.”