Hammond says Brexit deal could bring ‘double dividend’

Hammond says Brexit deal could bring ‘double dividend’ but pumps £500m more into preparing for talks with EU to FAIL as watchdog warns of ‘severe’ consequences of crashing out

  • Chancellor Philip Hammond has delivered what could be final pre-Brexit Budget
  • Mr Hammond said he was ‘confident’ an agreement would be reached with EU
  • But he said that no-deal preparations would be boosted by another £500million
  • Office for Budget Responsibility has warned crashing out of EU would be ‘severe’ 

Philip Hammond announced in the Budget he was boosting no-deal Brexit planning by £500million

Philip Hammond boosted no-deal Brexit planning by £500million today – as the government’s watchdog warned of ‘severe’ consequences if talks with the EU fail.

The Chancellor insisted he was still confident an agreement could be secured and raised the prospect of a ‘double dividend’ from higher economic growth and releasing his Brexit warchest.

But he also announced he was ploughing more money into preparations – taking the total to £4.2billion.

The announcement came as the Office for Budget Responsibility (OBR) warned the scale of the impact of leaving without a deal was almost impossible to predict.

It said disorderly Brexit ‘could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances’.

Mr Hammond said he was ‘retaining firepower to intervene’ if the economy needs more support in the coming months, with £15 billion in fiscal ‘headroom’ to deploy.

If the economy begins to tank, the Chancellor insisted he would ‘take whatever action is necessary’, including upgrading his spring statement to a Budget.

Mr Hammond said he was ‘confident’ the Brexit talks would deliver an agreement that would allow extra cash to be spent on public services.

Additional funding for the NHS would not be hit by a no-deal exit but cash for other public spending would be ‘flat real’, keeping pace with inflation, according to Treasury sources.

  • Some 32 MILLION Britons are in line for a tax cut of up to…

    Hammond’s £100 BILLION giveaway: Chancellor slashes income…

Share this article

Mr Hammond said: ‘We are at a pivotal moment in our EU negotiations and the stakes could not be higher.

‘Get it right, and we will not only protect Britain’s jobs, businesses and prosperity but we will also harvest a double-deal dividend, a boost from the end of uncertainty and a boost from releasing some of the fiscal headroom I am holding in reserve at moment.

‘We are confident that we will secure a deal which delivers that dividend, confident, but not complacent, so we will continue to plan for all eventualities.’

The Chancellor has already warned that this dramatic giveaway Budget assumes that there will be a Brexit deal – hinting that a collapse in the knife-edge negotiations with Brussels could undermine plans to draw a line under austerity.  

Mr Hammond said yesterday that the government would have to ‘wait and see what the situation was’ on ending austerity if there is no Brexit deal.

The Office for Budget Responsibility (OBR) – headed by Robert Chote (pictured) – warned the scale of the impact of leaving without a deal was almost impossible to predict

Theresa May (pictured centre in the Commons today) slapped down Mr Hammond after he suggested moves to end austerity were contingent on getting a Brexit deal

But Downing Street slapped down the Chancellor today, making clear the spending commitments in the Budget stood whether or not there is agreement with the EU.   

The Office for Budget Responsibility said in March that there was £15billion ‘headroom’ in the government’s plans which could be deployed.

‘What the Chancellor was pointing out in relation to a budget was that if economic circumstances change, he would consider economic interventions. That’s what you would expect any sensible Chancellor to do,’ the spokesman said. 

‘All of the spending commitments that the Chancellor will set out today are funded irrespective of a deal.

‘What the Chancellor said yesterday was that he would use the fiscal reserves that we have built up through hard work and sound economic management to ensure that Britain will succeed whatever the circumstances.

‘The Chancellor has spoken on numerous occasions about having maintained what he would describe as ‘fiscal firepower’ which he will be able to use in the event of a no-deal scenario.’  

Labour’s Chris Leslie, a former shadow chancellor, said forecast economic growth of no higher than 1.6 per cent a year was ‘a pathetic figure in anyone’s book’.

He said: ‘There is no Brexit dividend, only years of extended pain.

‘The Budget actually predicts Britain’s trade will decrease as a share of the economy in the next five years. This is not global Britain but a Britain shrinking in power and influence in the world: we are going to lose markets and market share.’ 


Source: Read Full Article