Boris Johnson told there’s not enough cash to fund no-deal Brexit policies

A no-deal Brexit would be disastrous to Boris Johnson and Jeremy Hunt’s spending plans, the Chancellor has warned.

The remaining Tory leadership contenders said they were prepared to take the UK out of the EU without a deal should they become Prime Minister.

But this stubborn stance would mean there would be no extra cash to meet their costly spending pledges, according to Chancellor Philip Hammond.

He wrote on Twitter: ‘The “fiscal firepower” we have built up in case of a no-deal Brexit will only be available for extra spending if we leave with an orderly transition.

‘If not, it will all be needed to plug the hole a no-deal Brexit will make in the public finances.’

Mr Johnson has pledged to give a tax cut to earners on more than £50,000, which would benefit the top 10% costing an estimated £9 billion.

He has also signalled he would be prepared to increase borrowing to fund infrastructure projects.

Mr Hunt will announce a £6b war chest to handle a no-deal Brexit.

He has also pledged cuts to corporation tax at an estimated cost of £13b per year in the short term and an increase in defence spending to cost an additional £15b in four years.

The “fiscal firepower” we have built up in case of a No-Deal Brexit will only be available for extra spending if we leave with an orderly transition. If not, it will all be needed to plug the hole a No Deal Brexit will make in the public finances.

— Philip Hammond (@PhilipHammondUK) July 1, 2019

 

All of this spending is in jeopardy if the men can’t strike a deal with the EU.

Mr Johnson has taken a more hardline approach, saying the exit must happen by the Halloween deadline ‘do or die’, but Mr Hunt said he would ask for a delay if a deal was in sight.