The Eurosceptic Tory MP will present a paper to cabinet in the next few weeks on whether to step up planning in case the UK leaves the EU without a deal. But cabinet ministers are divided on the matter, with some pro-EU cabinet ministers, such as chancellor Philip Hammond, opposing the idea of pumping more money into no-deal preparations. Yet Eurosceptic cabinet ministers, including Liam Fox, Penny Mordant, Chris Grayling and Andrea Leadsom back Mr Barclay’s proposal to recommence contingency preparations.
Eurosceptic ministers believe the threat of a no-deal Brexit gives Britain more leverage in any future negotiations with Brussels, the Financial Times has reported.
This view is heightened by the claim that the EU could refuse a further extension of Article 50, the mechanism for leaving the bloc.
In what a political aide described as a “major totemic battle”, the Brexit secretary faces an explosive backlash from Europhile colleagues, including business secretary Greg Clark, who believe it was a mistake for the Government to ever consider a no-deal Brexit.
One ally of the business secretary said: “We should always still continue to be ready if it came to it and have plans in place, but Greg Clark continues to believe that no deal is not an option and there is no parliamentary majority for no deal Brexit.
A majority of MPs have also signalled that they would try to bloc an exit without an agreement with the EU in all circumstance.
One ally of Mr Barclay said: “Steve Barclay’s view is that you can’t stop preparing for it even if it’s unlikely.
“His view is that it would be responsible for the government to prepare.”
Mr Barclay will either present his paper at cabinet next Tuesday or a week later, according to Whitehall figures.
A political aide said “the dilemma is whether to ramp up or ramp down” no-deal planning.
If the Brexit secretary chooses the former, it could result in further attempts to strike a deal with ferry companies to provide contingency capacity across the English Channel.
That planning, which was cancelled after the six month extension was agreed in April, has already cost the Department for Transport £83million.
Downing Street was unable to say precisely how much money Whitehall has spent on no-deal planning, saying only that £2billion of the £4billion earmarked for Brexit overall had been spent so far.
Other elements of no-deal planning, nicknamed Operation Yellowhammer, have included preparing Manston airport in Kent as a holding area for trucks to prevent Channel port traffic jams, the NHS chartering a plane to fly in medical supplies from The Netherlands, and precautions to ensure medicines and blood products would still meet EU testing requirements.
In this week’s cabinet meeting Mr Barclay raised the issue of no-deal planning, a topic that has seldom been discussed since the April delay.
On Tuesday he urged the Prime Minister to order civil servants to step up contingency preparations once again.
Ministers are split on whether no-deal preparations would be beneficial.
Nigel Farage, who recently formed the Brexit Party, has said that if his party win the most votes in this months’ EU elections Parliament would have to reconsider the idea of a no-deal departure form the EU.