NO DEAL = AUSTERITY

Chancellor to halt public services boost in event of hard Brexit

THERESA May’s promised “end of austerity” could be cancelled if Britain crashes out of the EU without a deal, Philip Hammond warned yesterday.

The Tory Chancellor is today expected to set out a raft of “feelgood” public spending increases in his final Budget before Brexit.

But he said his plans to pump cash into social care, benefits and pothole-riddled roads were based on the assumption Mrs May will agree a good deal with Brussels.

And he suggested he would need to take a “different approach” and hold an emergency budget if not.

He told Sky News: “Frankly, we’d need to have a new Budget that set out a different strategy.”

Mr Hammond also said he had built up a “reserve of borrowing power”, allowing him to intervene in the event of no-deal. But he warned: “If businesses are no longer able to trade with EU neighbours, if supply chains are cut off, they will have to find different markets and different ways of doing business.”

He also pledged to publish Treasury projections for how Mrs

May’s agreement with Brussels will affect the economy, but only once the deal is finalised.

Shadow Chancellor John Mcdonnell said Mr Hammond’s comments were “shocking” and accused him of “callous complacency”. He added: “He seems to have accepted a no-deal Brexit and he does want us to be like Singapore, a tax haven which will undermine our manufacturing base and I think put people’s living standards at risk.”

TUC leader Frances O’grady also warned: “It’s very clear with a hard Brexit, our economy would end up in real trouble.”

In his spree today, the Chancellor is expected to announce £30billion for roads. He will also outline plans for interest-free loans to people trapped in a cycle of payday lending.

But Labour said his £2billion for mental health care was insufficient.

And Mr Hammond faces pressure to pump cash into universal credit.

More than 20 Tory MPS have written to the Chancellor, urging him to spend up to £3billion scrapping cuts to UC. The Mirror is also campaigning for the Tories to rethink the new welfare system.

Mr Mcdonnell called on MPS on all sides to vote down the Budget if the Government does not halt the bungled benefits shake-up.

The Chancellor hinted at more cash, saying: “We’ll always try to smooth those [difficulties] out.”

Asked if people will be £200 a month worse off – as Tory welfare chief Esther Mcvey admitted – he told the BBC: “I would hope not.”