Business leaders have repeatedly warned about the consequences of leaving the EU without a deal, with the CBI saying the UK would face tariffs on 90% of its EU exports and a number of new regulatory hurdles.
UK consumers could find going on holiday and making card payments for EU products more expensive because Britain would no longer be part of the EU’s payments process.
Mr Raab also said the UK would not pay the full £39bn divorce bill if the UK fails to reach a deal with Brussels
- Special Cabinet meeting being held to discuss planning for no deal Brexit
- Government is publishing 28 papers spelling out impact of crashing out of bloc
- Dominic Raab is meeting EU chief negotiator Michel Barnier in Brussels later
The PM will spell out the timeline at a special Cabinet meeting to consider the consequences of a failure in negotiations with Brussels.
The gathering comes as ministers are set to unveil another tranche of papers on the preparations for the UK crashing out of the bloc.
The documents will confirm that drivers would need a new international licence to use their cars on the continent.
Britons with less than six months to run on their passports would also have to renew before travelling to the EU.
But the government will also reveal some good news – declaring that mobile phone companies have agreed there will be no extra roaming charges.
Meanwhile, Brexit Secretary Dominic Raab has opened another flank in the Brexit battle by threatening to slash the £39billion ‘divorce bill’ if Brussels refuses to compromise.
Mr Raab is meeting EU chief negotiator Michel Barnier in the Belgian capital later today
Speaking on BBC Radio 4’s Today programme, Mr Raab said one of the consequences of a no-deal Brexit ‘is that obviously we wouldn’t pay out the money that has been agreed as part of the withdrawal agreement’.
The said the UK would ‘recognise our strict legal obligations’ but that the amount paid would be ‘significantly, substantially lower’ than the £39billion.
There are claims the figure could be more than halved if the EU blocks an agreement and the UK could slow down the timetable for paying the balance.
Mr Raab issued a stark warning to Tory Brexiteers – and some Remainers – who have criticised Mrs May’s Chequers plan, saying they will merely increase the chances of a no-deal outcome.
‘I do appreciate the concerns on all sides,’ he said.
‘But when push comes to shove, there will be the choice between the deal that I’m confident we can strike with the EU and the no deal scenario.
‘We are making sure we are ready for the latter. But I think it would be by far the optimum outcome to have a negotiated deal, and I think that will focus everyone’s minds.’
Mr Raab’s comments echo Mrs May’s statement yesterday that Britain’s £39billion divorce offer to Brussels will be slashed if the EU fails to grant a comprehensive trade deal.
The Prime Minister insisted it was a ‘specific offer’ made on the expectation of an acceptable agreement.
She warned the bloc that without a deal ‘the position changes’. Mrs May stressed that the UK was ‘a country that honours our obligations’. But sources suggested the divorce payment could be slashed by more than half if there is no deal.
Mrs May said: ‘The specific offer was made in the spirit of our desire to reach a deal with the European Union and on the basis, as the EU itself has said, that nothing is agreed until everything is agreed. Without a deal, the position changes.’
A second set of ‘technical notices’ outlining the preparations for a no-deal exit will be published today.
The 24 notices will also cover public procurement, vehicle standards and the future of co-operation with EU space programmes.
On mobiles, ministers will announce they have struck an agreement with the major mobile phone operators that will avoid a return to the exorbitant charges of the past.
Whitehall sources said Vodafone, Three, EE and O2, which account for 85 per cent of the market, have agreed the deal following months of talks with ministers. ‘Market forces suggest the others will follow suit,’ a source said last night.
The £45-a-month cap on mobile data in the EU will also remain, even if talks collapse.
On driving licences, motorists will need a new international licence to use their cars in the EU in the event of no deal. The EU is likely to refuse to recognise UK driving licences if Brexit talks collapse, a Department for Transport document will state.
An international driving licence will be needed for anyone driving in the EU after March 29, for hiring or obtaining insurance, unless Brussels or individual member states waive the rules. To complicate matters, there are two types of permit and different versions could be needed for different countries.
An EU notice issued last month said: ‘A driving licence issued by the UK will no longer be recognised by the member states.’
Ministers say the UK will continue to recognise EU licences.
Government sources said a Cabinet meeting today – the first of its kind – will be told that ministers will have to begin activating the no-deal contingency plans in November in order to have them up and running in time for the UK’s departure from the EU in March next year.
The timescale will intensify the pressure on both sides to strike a deal at a special EU Brexit summit now being pencilled in for the middle of November.
Brussels is sceptical about Mrs May’s willingness to leave without a deal. The new technical notices are designed to demonstrate to both Brussels and the public that the Government will be ready to leave at the end of March.
Mr Raab said: ‘We are stepping up our no-deal preparations so that Britain can continue to flourish, regardless of the outcome of negotiations.’
Questioned in the House by Tory Chris Philp on whether the £39billion divorce bill would be withheld if there was no deal with the EU, Mrs May said Britain was a ‘country that honours our obligations’.
But she insisted it was ‘very clear that we need to have a link between the future relationship and the withdrawal agreement’.
‘The specific offer was made in our desire to reach a deal with the European Union,’ she said.
‘And on the basis, as the EU themselves have said, that nothing is agreed until everything is agreed, without a deal the position changes.’