By Andrew MacAskill
LONDON, July 31 (Reuters) - Britain is ramping up preparations for a no-deal Brexit by preparing to spend an extra 2.1 billion pounds ($2.6 billion) to make sure the country is ready to leave the European Union with or without a divorce deal at the end of October. The new government led by Prime Minister Boris Johnson, which took power last week, has pledged to leave the trading bloc without an agreement in three months unless the EU agrees to renegotiate the deal agreed by his predecessor Theresa May.
Ministers have warned that one of the most hotly contested elements of the divorce agreement - the Irish border backstop - will have to be struck out if there is to be a deal, something the EU has repeatedly said it won't agree to.
In his first major policy announcement, new finance minister Sajid Javid doubled spending on preparations for a no deal exit this year. The extra money will fund a nationwide advertising campaign, help Britons living abroad, ensure the supply of medicine and improve infrastructure around ports.
"With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready,” Javid said. "We want to get a good deal that abolishes the anti-democratic backstop. But if we can't get a good deal, we'll have to leave without one."
Wrenching the United Kingdom out of the EU without a deal means there would be no formal transition arrangement to cover everything from post-Brexit pet passports to customs arrangements on the Northern Irish border.
Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain into a recession, roil financial markets and weaken London's position as the pre-eminent international financial centre.
The finance ministry said among other initiatives, 434 million pounds will be spent to ensure vital supplies of medicines and medical products can be brought into the country, including hiring additional freight capacity, warehousing and stockpiling.
To get people and businesses ready for a no-deal Brexit, 138 million pounds will be spent on one of the biggest peacetime advertising campaigns.
The finance ministry also said a further 1 billion pounds will be available for government departments and the devolved administrations in Scotland, Wales and Northern Ireland to improve their readiness.
This means the government has in total allocated 6.3 billion pounds to prepare for a no-deal exit, including 4.2 billion pounds of funding for this financial year.
Javid’s predecessor Philip Hammond, who opposed leaving the EU without a divorce deal, was accused by Brexit supporters of failing to spend enough money to get Britain ready for a no-deal Brexit, undermining its negotiating position with Brussels. ($1 = 0.8181 pounds) (Reporting by Andrew MacAskill; Editing by Kirsten Donovan)