The departments run by Michael Gove and Liam Fox are facing an “impossible challenge” as they prepare for Brexit, parliament’s spending watchdog has warned.

The environment and trade departments do not have a clear plan of Brexit priorities and must explain what they will not be delivering, according to the public accounts committee.

Its report released on Friday says the food and chemical industries face “substantial risks” of disruption if preparations are not completed in time.

The PAC concludes that the two departments’ preparations are being hampered by “pervasive uncertainty” about the nature of the UK’s future relationship with the EU.



MPs found that “slow decision-making” by the Treasury on funding the extra bureaucratic costs imposed by Brexit was standing in the way of effective preparation.

Both departments were “optimistic” in evidence to the PAC inquiry about their ability to be ready by March 2019 to deliver whatever outcome emerges from negotiations. MPs said they were concerned about how realistic the plans were.

The departments may feel that the 21-month transition period agreed in March has given them “some breathing space”, but in reality “this does not mean that they can take their foot off the gas”, the committee said.

Q&A What is a customs union? Show A customs union means that countries agree to apply no or very low tariffs to goods sold between them, and to collectively apply the same tariffs to imported goods from the rest of the world. International trade deals are then negotiated by the bloc as a whole. For the EU, this means deals are negotiated by by Brussels, although individual member state governments agree the mandate and approve the final deal. The EU has trade deals covering 69 countries, including Canada and South Korea, which the UK has been attempting to roll over into post-Brexit bilateral agreements. Proponents of an independent UK trade policy outside the EU customs union say Britain must forge its own deals if it is to take advantage of the world’s fastest-growing economies. However they have never explained why Germany manages to export more than three times the value in goods to China than Britain does, while also being in the EU customs union. Jennifer Rankin

Both were still having to prepare for the possibility that Britain will leave without a transition, or with no deal at all, MPs said.

In a letter to the PAC, the Department for Exiting the EU’s top civil servant, Philip Rycroft, revealed that Whitehall ministries were working on 325 “workstreams” to prepare for Brexit.



Defra alone was working on 64 areas, ranging from import controls on animals and animal products to the authorisation of new chemical products.

The committee heard that its plans involved the possible use of “manual workarounds” if new IT systems are not ready in time.



The cross-party committee warned that this would be “costly and embarrassing” and “could impede or at least slow down imports and exports causing severe delays at the border”.

The report said: “There are substantial risks, including disruption to the agri-food and chemical industries, if Defra’s IT systems are not ready in time.



“With only a year to go until the UK leaves the EU, and in light of Defra’s poor track record in implementing new IT systems in the past, we have concerns over the potential for disruption to the agri-food and chemical industries.”

It was “unrealistic” for Defra to press ahead with planned efficiency savings totalling £138m in 2018/19, said the report. It called on the department to make clear what other priorities it is scrapping or scaling back to free up staff and resources for Brexit preparations.

The committee’s chair, the Labour MP Meg Hillier, said: “The clock is ticking and there is still no clarity about what Brexit will mean in practice. As our new report again makes clear, departments are under extreme pressure.”

A government spokesman said Whitehall was “rising to the challenge” of Brexit.

“The government has set a clear plan for Brexit and has made real progress delivering on this,” the spokesman said.



“Close collaboration between departments is vital as we negotiate our exit from the EU and develop our future trade policy with the world, and Whitehall is rising to the challenge.”

