New border controls will not be ready in time for a hard Brexit, the government has been warned.
The National Audit Office (NAO) says delays and long queues would result and that criminal gangs would be quick to take advantage of the chaos.
Exporters in the UK have simply not been given enough time to prepare for the imposition of border controls in the event of Britain leaving the EU without a deal, says the NAO.
The warning comes as it emerged plans are being drawn up to charter or even requisition ships to maintain food and medicine supplies if the UK does crash out.
Prime Minister Theresa May told the Commons this week that she was confident of securing an exit deal with the EU and that it was “95 per cent complete.”
But the sticking point in the negotiations remains the issue of the Irish border backstop and failure to agree on that could scupper any agreement.
Although the NAO acknowledged that the Government had made progress with plans for a hard Brexit, it said businesses would still pay a high price.
Sir Amyas Morse, NAO comptroller and auditor general, said: “The government has openly accepted the border will be sub-optimal if there is no deal with the EU.
“It’s not clear what sub-optimal means in practice… what is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price.”
The NAO said £423bn of trade and more than 200 million people moves across UK borders every year.
Much of that trade is with the EU, with the rest moving on to other destinations via the rest of Europe.
The UK’s membership of the single market and customs union makes this fairly seamless, with free movement of goods, people and services around Europe.
That would end if no deal is agreed and would mean border controls going up as the UK switched to trading and World Trade Organisation (WTO) terms.
More than 250,000 firms would have to fill out customs forms for the first time and customs declaration would rocket from 55 million to 260 million, says the NAO.
It said there were 12 projects deemed “critical” to prepare for no deal and that 11 of these may not be delivered in time or to an acceptable standard.
This would cause delays at border crossings, huge queues of lorries at ports and impact on security, migration, trade, tourism and collection of customs duties, says the NAO.
The NAO is an independent body responsible for reporting to MPs on the operation of government departments.
The government insists it has made good progress with plans for a hard Brexit, which have been underway for two years.
“We have robust plans in place to ensure the border continues to operate from the day we leave,” a spokesman said.