No-deal Brexit will mean spending cuts claims Hammond

PHILIP Hammond infuriated Brexit-backing Tory MPs last night by threatening spending cuts if Britain quits the EU without a deal.

The Chancellor said ministers would have to “refocus” priorities to deal with a sudden break from Brussels – sparking claims of a return to the Treasury’s 2016 “Project Fear” campaign.

Mr Hammond’s comments came after a Whitehall official was photographed carrying a confidential document headed Operation Yellowhammer, detailing preparations for a no-deal Brexit.

Asked about the document during a visit to Glasgow, the Chancellor said: “Departments have the funding for no-deal planning. What we’re beginning to discuss is now part of long-term contingency planning.

“In no-deal circumstances we would have to refocus Government priorities so that Government was concentrated on the circumstances that we found ourselves in.”

But he added: “Let me reiterate again that is not the outcome we are expecting and it’s not the outcome we’re seeking.”

Eurosceptic Tory backbencher Andrew Bridgen said: “This sounds like the ‘punishment budget’ that George Osborne threatened if we voted to leave the EU. Project Fear didn’t work then and it won’t work this time either. The Treasury needs to get a new song sheet – and a new spreadsheet.”

Downing Street attempted to play down Mr Hammond’s cuts warning. The Prime Minister’s spokesman said: “There is a pot of money available and nobody has been told to cut front-line spending. There is £1.5billion that has been made available across government for Brexit preparedness.”

Meanwhile, hopes of a deal appeared to rise in Whitehall after the latest round of Brexit talks.

EU Exit Secretary Dominic Raab described about six hours of face-to-face talks with the bloc’s chief Brexit negotiator as “another round of positive and constructive talks with Michel Barnier”.