The government would be forced to abandon the economic plans due to be set out in Monday’s autumn budget in the case of a no-deal Brexit, Philip Hammond has revealed.
The Chancellor told Sky’s Sophy Ridge that the current version of the budget – which is expected to outline Theresa May’s plans to end austerity – was based on the assumption the UK would be able to strike a deal with the EU.
In the case of the UK crashing out of the EU, “we would need to take a different approach to the future of Britain’s economy”, Hammond said on Sunday.
“We would need to look at a different strategy and frankly we would need to have a new budget that set out a different strategy for the future.”
Asked whether a no-deal Brexit would leave less money for government departments, he said: “We would have to wait and see what the situation was. If we left the European Union without a deal we would want to see how markets and businesses and consumers responded to that.”
But the Chancellor insisted he is still “very confident” the government would be able to negotiate a deal.
Hammond’s comments attracted criticism from both sides of the political divide, with Tory backbencher Jacob Rees-Mogg saying the government should be “making announcements now about how we would deal leaving on World Trade Organisation terms”.
“The Treasury has been the bastion of Remoanerism since the referendum and indeed before,” the ardent Brexiteer added.
Meanwhile, shadow chancellor John McDonnell called Hammond’s interview “shocking”, saying May’s right-hand-man had “accepted a no-deal Brexit”.