Money for ‘no deal’ Brexit scenario to come from reserve, says Hammond
The Chancellor of the Exchequer, Philip Hammond, has told the Treasury Committee that the money which will be spent on a ‘no deal’ Brexit scenario will come from reserve and that he will not allocate funds to government departments ‘in advance of the need to spend’
11 Oct 2017
Hammond appeared before the Treasury Committee, for the first time since Nicky Morgan took over from Andrew Tyrie, to discuss the work he was carrying out as the Chancellor.
The talks centred around the current Brexit negotiations and preparations for a possible ‘no deal’ outcome, with Hammond due to appear before the Committee again before he gives his Autumn Statement on 22 November.
On the subject of a ‘no deal’ scenario, Hammond said that the Treasury is ‘prepared to spend when we need to spend’ and have planned for all scenarios.
The Chancellor has stated that he will not allocate funds to departments prematurely to ‘make a demonstration point’ although £250m has already been given to departments from reserve to prepare for Brexit.
When asked how much money the Treasury would be prepared to set aside for Brexit, Hammond said that it was too early to put a specific figure on the investments which will need to be made.
Hammond admitted that the EU needs to engage more with the UK on planning a transition deal as an interim deal is in everyone’s interest. The transition will start on 30 March 2019 and will last around two years, as previously outlined by prime minister Theresa May. The Chancellor believes the EU should move away from the current talks structure and start exploratory talks on a transition, and on a future trade relationship.
Katherine Braddick, director general for the Treasury, appeared alongside Hammond but mostly remained quiet. When asked about the future for financial services Braddick admitted that the largest group planning to relocate due to Brexit uncertainty is international banks and called for a transition period so that businesses have longer to decide and time to see what deal would emerge.
Report by Amy Austin