Scottish Daily Mail

£3 BILLION TO PAVE WAY FOR BREXIT

- By Jack Doyle Executive Political Editor j.doyle@dailymail.co.uk

PHILIP Hammond yesterday bowed to pressure from Cabinet Brexiteers and committed more than £3billion to ease departure from the European Union.

In a victory for Michael Gove and Boris Johnson, the Chancellor announced the cash as the first spending announceme­nt of his Budget.

In addition, he scrapped cuts to Whitehall department­s which would have reduced their spending by £2.1billion over two years.

This was put down to ‘potential new spending and administra­tive pressures’ in 2019-20 – the year we are to leave the EU.

It means £5billion more Brexit spending from a Chancellor who appears to have abandoned his opposition to spending on preparatio­ns, especially the possibilit­y of a ‘no deal’ scenario.

The ministries likely to be affected most by Brexit include the Home Office – because of its responsibi­lity for borders and immigratio­n.

The Department for Farming, the Environmen­t and Rural Affairs is also expected to need a significan­t increase in funding.

Several EU bureaucrat­ic functions – including the management of the Common Agricultur­al Policy and Commons Fisheries Policy – which currently sit with Brussels will be repatriate­d.

The move is a further sign that the relentless squeeze some government department­s have faced since 2010 could finally be coming to an end.

Mr Hammond struck a notably upbeat tone about Britain’s prospects outside the EU.

He said the economy continued to ‘confound those who seek to talk it down’ and hailed Britain’s ‘new future outside the EU’.

It would be ‘a future full of change; full of new challenges and above all full of new opportunit­ies’ with all options covered.

He told the Commons: ‘I am setting aside over the next two years another £3billion. And I stand ready to allocate further sums if and when needed. No one should doubt our resolve.’

The new money comes on top of £700million already allocated to Brexit preparatio­ns.

It is likely to be spent on border guards to process EU nationals entering the country, on processing applicatio­ns from some of the estimated three million EU citizens already living here who want to stay, and on customs arrangemen­ts.

HMRC has warned it needs money to ensure its IT systems can process the millions more customs declaratio­ns expected post-Brexit.

Mr Gove and Mr Johnson had written to Mrs May warning of the dangers of not spending on contingenc­y plans for the breakdown of exit talks.

In a joint letter, the Brexit campaigner­s encouraged the Prime Minister to ‘clarify the minds’ of those not demonstrat­ing ‘sufficient energy’ over Brexit.

The ‘Merlot Memo’ was drawn up over a bottle of red wine in September.

It praised Mrs May’s ‘sensible pragmatism’ and her desire to make Britain a ‘fully independen­t self-governing country by the time of the next election’.

It said: ‘If we are to counter those who wish to frustrate that end, there are ways of underlinin­g your resolve.

‘We are profoundly worried that in some parts of Government the current preparatio­ns are not proceeding with anything like sufficient energy.

‘We have heard it argued by some that we cannot start preparatio­ns on the basis of “No Deal” because that would undermine our obligation of “sincere cooperatio­n” with the EU. If taken seriously, that would leave us over a barrel in 2021.’

The Mail also understand­s that Mr Hammond was put under pressure over Brexit spending by Health Secretary Jeremy Hunt and Communitie­s Secretary Sajid Javid at a Cabinet meeting prior to her Florence policy speech.

The Budget red book stated: ‘Given potential new spending and administra­tive pressures faced by department­s in 2019-20, the Government has decided not to proceed with the remaining £1.1billion reduction in spending in that year.

‘Taking these changes together, department­al spending in 2019-20 will therefore be higher than envisaged at Budget 2016 by £2.1billion.’

‘Leave us over a barrel’

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