No-deal Brexit would require a new Budget, Chancellor admits

No-deal Brexit would require a new Budget, Chancellor admits

Philip Hammond has admitted there would need to be a new Budget in the event of Britain crashing out of the European Union without a deal.

The chancellor revealed on the eve of the Budget the government would need to look at a “different approach” to the future of the UK’s economy if Theresa May fails to secure a deal with the bloc.

He also indicated the Treasury would be unable to fulfil the prime minister’s commitment to end the era of austerity if negotiators failed to secure deal.

Mr Hammond’s remarks were immediately seized upon by the Tory MP and prominent Eurosceptic, Jacob Rees-Mogg, who dubbed the Treasury the “last bastion of Remoanerism” and described the chancellor’s admission as a “punishment Budget”.

Pressed on whether the government would be able to end austerity without a Brexit deal, Mr Hammond replied: “If we were to leave the European Union without any deal – and I think that’s an extremely unlikely situation but of course we have to prepare and plan for all eventualities, as any prudent government would – if we were to find ourselves in that situation then we would need to take a different approach to the future of Britain’s economy.”

He added on Sky News’s Sophy Ridge on Sunday programme: “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.”

Asked if Britain would be worse-off after Brexit, regardless of whether there was a deal, Mr Hammond added: “Over my lifetime, people’s living standards have almost doubled and we want to go on seeing that growth in living standards so that we can make good on our promise to the next generation that they too will be better-off than their parents.”

The chancellor also hinted he would use his Commons statement on Monday to provide additional funding to smooth the transition to universal credit amid warnings low income families are being driven into debt.

“I’ve already put over £2 billion pounds into, over the last two Budgets, into smoothing that transition,” he said.

“We continue to look at how this process is working and 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.”

Appearing after Mr Hammond on the same programme, his opposite number, John McDonnell, said he was “really shocked” by the chancellor’s interview, accusing him of having a “callous complacency about this week’s Budget, and the future”.

“He seems to have accepted a no-deal Brexit,” the shadow chancellor added.


The Independent has launched its #FinalSay campaign to demand that voters are given a voice on the final Brexit deal.

Sign our petition here

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