Hammond: No-deal Brexit means no cash cushion
03 July, 2019
British Finance minister Philip Hammond challenged the two rivals to become Britain’s prime minister over their spending promises on Monday, warning that walking away from the European Union without a deal would use up the extra money in the budget.
With former London Mayor Boris Johnson and foreign minister Jeremy Hunt stepping up their campaigns to replace Theresa May, both have turned their attention to how they would run a country that is deeply divided after its 2016 EU referendum.
They have promised to increase spending, particularly on public services and infrastructure, and to cut taxes, but they also say they are willing to take Britain out of the EU without a deal, an outcome that Hammond said would use up his war chest of almost £27 billion ($34 billion).
“The ‘fiscal firepower’ we have built up in case of a no-deal Brexit will only be available for extra spending if we leave with an orderly transition,” Hammond tweeted.
“If not it will all be needed to plug the hole a no-deal Brexit will make in the public finances.”
Later, in an interview with the BBC, Hammond said Britain had built up a reputation for fiscal responsibility and had to live within its means.
“People have to be honest about the consequences of either spending more money or of cutting taxes,” he said, warning of the “temptation to get into a bidding war.”
“I think they need to be very careful about setting out these ambitions.”
More than three years after voting to leave the EU, Britons still do not know whether they will leave with a deal, or without, or even leave at all.
Hunt, playing catch-up with Johnson as both try to court the members of the Conservative Party who will appoint one of them, said he understood that some of the “things I passionately want to do ... will take longer” in a no-deal Brexit.
“Our immediate priority is going to be to support businesses that are directly affected by a dramatic change in our circumstances,” he told a news conference in central London.
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