London preparing bailout for firms in event of no-deal Brexit

Michael Gove (above) has confirmed that a bailout “package” is being developed for companies that could face cash shortages in the event of a no-deal Brexit.
Michael Gove (above) has confirmed that a bailout “package” is being developed for companies that could face cash shortages in the event of a no-deal Brexit.PHOTO: REUTERS

LONDON (DPA) - The British government has drawn up a secret list of major companies that could require financial aid if London carries out its threat to leave the European Union without a negotiated withdrawal deal, the Times newspaper in Britain reported on Saturday (Aug 10).

Separately, the Daily Telegraph reported that the British government has held talks with Buckingham Palace over fears of a constitutional crisis that could force Queen Elizabeth II to intervene if Britain leaves the 28-nation bloc on Oct 31 without parliament backing.

Michael Gove, Britain's minister in charge of planning a possible no-deal Brexit, confirmed for the first time on Friday that a bailout "package" was being developed for companies that could face cash shortages in the event of a no-deal Brexit.

Dubbed "Operation Kingfisher," the package is designed to help companies that will be "temporarily affected" to weather the transition, Gove said.

Construction and manufacturing firms are seen as particularly vulnerable, the Times reported. A government spokesperson would not comment on the newspaper report when contacted by dpa.

"The UK is leaving the EU on Oct 31 - no ifs, no buts - and it is my top priority to make sure that every part of the UK is ready to leave," Gove said during a visit to Northern Ireland on Saturday.

Gove was echoing the line of Prime Minister Boris Johnson, who says he will take Britain out of the EU, with or without a comprehensive deal, on Oct 31. He demands that Brussels abandon elements of the existing withdrawal deal agreed by his predecessor, Theresa May.

 

Brussels has so far said it will not renegotiate the terms of withdrawal, making a no-deal Brexit on Oct 31 increasingly likely.

The political impasse has even provoked fears of a constitutional crisis in Britain, with speculation that Johnson could force an EU exit even if he were to lose a no-confidence vote in the British parliament.

Dominic Cummings, a close adviser, has reportedly said that Johnson could remain in office in the event of a no-confidence vote and set a date for elections after Oct 31.

That has prompted calls from opposition leaders for the Queen to intervene if Johnson should refuse to resign.

Buckingham Palace's fears of being drawn into the protracted battle were made apparent on Saturday as the Telegraph reported that Edward Young, the Queen's private secretary, spoke by phone this week with Mark Sedwill, the government's top civil servant.

The two officials agreed to keep a "watching brief" on the developing situation, a source told the newspaper.

London has so far played down the economic consequences of leaving the EU without a deal, despite warnings of serious fallout from non-partisan groups like the Bank of England.

Britain's economy unexpectedly shrank in the second quarter, marking the first contraction since 2012, data released on Friday showed.

But Chancellor of the Exchequer Sajid Javid insisted that "the fundamentals of the British economy are strong" and said he did not expect the country to slip into recession.