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12 March 2020

Something is missing from the 2020 Budget

With so little of substance on new Brexit-related infrastructure spending, the EU will continue to believe that the UK’s no-deal threat is a bluff.

By Stephen Bush

On 31 December 2020, the United Kingdom will complete its exit from the European Union: having left the political structures on 31 January 2020, it will leave the regulatory and customs orbit of the EU.

That means that the UK will need new physical infrastructure to become a proper third country – infrastructure at and around ports, as well as to make new hires to vastly expand the number of people working at ports and borders.

Theresa May did not commit to anything like the required level of infrastructure investment, in part because her preferred Brexit end state would have kept the UK within the customs and regulatory orbit of the European Union – at least in the case of anything that required new checks. That was one of several reasons why EU diplomats did not believe that May would voluntarily pursue a no-deal Brexit. In view of this, many EU diplomats believe that the UK’s apparent willingness to pursue a no-deal Brexit at the end of this year is a bluff: Boris Johnson has done little to fix his “Theresa May problem” and boost the UK’s infrastructure-based readiness.

The British government has started to talk about hiring more HMRC staff to tackle the increased workload at customs checks, and Sajid Javid made an extra £2bn available for “Brexit preparations” in the 2019 Spending Review. But, to be frank, the biggest and most controversial task will be assembling the necessary physical infrastructure. It’s one thing for the people of north Wales or Kent to vote for Brexit and elect a Conservative MP. It’s quite another to be willing to put up with building sites around Holyhead or Dover.

There was a lot of infrastructure spending in the Budget, and much of it is focused on areas that voted Conservative for the first time in 2020 – but very little of substance is focused on new Brexit-related infrastructure spending. We have not yet seen anything like the scale of work required to deliver a no-deal Brexit, or even the bare-bones free trade agreement that the government says it wants on 31 December. Rightly or wrongly, that means the European Commission will continue to suspect that the British position is a bluff.

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