The money will be directed towards transport, healthcare, energy, law enforcement and security as no deal planning is intensified. Additional cash will be handed out to deal with “civil contingency costs” if no agreement is reached. A Government source told the Sun: “The Chancellor knows what needs to be done and if action is necessary then you will see decisions very soon.”
By law, the UK is set to exit the EU on March 29 next year if a withdrawal agreement isn’t passed by Parliament.
Ministers in the departments that would be most affected by a no deal Brexit are planning to increase spending in key areas as an insurance against a non-negotiated exit.
Spending of the fund would also show the EU that Britain is serious about being able to walk away without an agreement if there is no movement on the backstop.
Recipients of Mr Hammond’s no deal hand-out will include Home Secretary Sajid Javid, who will receive around a quarter of the pot with £500million to shore up complications at UK borders for security and trade issues.
The Border Delivery Group, a cross-government body, will be given an additional £25million to upgrade IT systems and customs checks.
A further £400million has been earmarked for Michael Gove.
The Environment Secretary will be charged with spending the cash on protecting UK fisheries and allowing for crucial chemicals to be imported from the EU to ensure clean drinking water.
International Trade Secretary Liam Fox will be handed more than £100million to assist in recruiting more trade negotiators around the world.
Senior Tories are now urging Theresa May to prioritise no deal planning as the date of the UK leaving the EU in March approaches.
To date, a total of £4.2billion has been earmarked for EU exit preparations.
Fears of economic chaos loom as the chances of a no deal increase, with one study suggesting that 750,000 jobs could be put at risk by the situation.
Jo Stevens, Labour Shadow Secretary of State for Wales, has said that the research from UK Trade Policy Observatory, reveals a no deal Brexit would be a “jobs destroyer”.
She added: “It would leave communities starved of work.”
Although, Jacob Rees Mogg has suggested that a no deal Brexit could boost the UK economy by £1.1trillion over 15 years.
The leader of the European Research Group has said: “Leaving the EU on World Trade Organisation terms would lead to a quite remarkable economic advantage for the UK.”