Ham­mond: Bud­get re­lies on Brexit deal

Hull Daily Mail - - NATIONAL -

PHILIP HAM­MOND has warned the UK econ­omy will have to strike out in a “dif­fer­ent di­rec­tion” if the Govern­ment is un­able to agree a Brexit deal with Brus­sels.

On the eve of the Bud­get yes­ter­day, the Chan­cel­lor said he would have to tear up his plans and is­sue a new Bud­get if Bri­tain leaves the EU next March with­out an agree­ment in place.

De­spite Theresa May’s prom­ise at the Con­ser­va­tive Party con­fer­ence that the era of aus­ter­ity was com­ing to an end, Mr Ham­mond played down the prospects of a spend­ing give­away when he makes his speech to the Com­mons to­day.

He said de­tailed de­part­men­tal al­lo­ca­tions would have to wait un­til the spend­ing re­view next year by which time the out­come of the Brexit ne­go­ti­a­tions is ex­pected to have be­come clear.

Shadow chan­cel­lor John Mcdon­nell said he was “shocked” by Mr Ham­mond’s re­marks which, he said, showed min­is­ters were pre­par­ing to move to a Sin­ga­porestyle low tax, low reg­u­la­tion econ­omy fol­low­ing a no-deal Brexit.

Mr Ham­mond in­sisted he re­mained con­fi­dent the Govern­ment would reach an agree­ment with Brus­sels but said they had to be pre­pared for any even­tu­al­ity, in­clud­ing a no-deal break.

“We would need to look at a dif­fer­ent strat­egy and frankly we’d need to have a new Bud­get that set out a dif­fer­ent strat­egy for the fu­ture,” he told Sky News’s So­phy Ridge on Sun­day pro­gramme.

“We would take ap­pro­pri­ate fis­cal mea­sures to pro­tect the econ­omy, to pre­pare us for the fu­ture and to strike out in a new di­rec­tion that would en­sure that Bri­tain was able to suc­ceed, what­ever the cir­cum­stances we found our­selves in.”

With Tory MPS in­creas­ingly restive over the im­pact of the roll-out of Uni­ver­sal Credit on low in­come fam­i­lies, Mr Ham­mond sig­nalled he was ready to pro­vide ad­di­tional sup­port to ease the tran­si­tion to the new sys­tem.

“If we find cliff edges and dif­fi­cul­ties, fric­tions in the move from the old ben­e­fits sys­tem to Uni­ver­sal Credit, then of course will al­ways try to smooth those out and be prag­matic about it,” he said.

The Chan­cel­lor will also use the Bud­get to set out plans for a £28.8 bil­lion na­tional roads fund for ma­jor routes, with a fur­ther £420 mil­lion for lo­cal pot­hole re­pairs, in part-funded by ring-fenc­ing rev­enues from ve­hi­cle ex­cise duty.

He is also ex­pected to find ex­tra cash for de­fence, so­cial care, and an ex­ten­sion of su­per­fast broad­band to re­mote ru­ral ar­eas as well as a tem­po­rary cut in busi­ness rates for small firms. How­ever, he in­di­cated that any fur­ther loos­en­ing of the purse strings would have to wait un­til the out­come of the Brexit ne­go­ti­a­tions is clear.

“Once we get a good deal from the Euro­pean Union and the smooth exit from the EU, we will be able to show the Bri­tish peo­ple that the fruits of their hard work are now at last in sight,” he told The An­drew Marr Show.

Philip Ham­mond

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