Theresa May slapped down her Chancellor today by promising to spend cash now in preparation for a Brexit ‘no deal’ – just hours after Philip Hammond ruled out any such splurge.
Speaking in the Commons this afternoon, the Prime Minister revealed £250million of taxpayers’ money had already been set aside to help departments plan for the UK leaving the EU without a trade deal.
She also announced the Treasury will soon set out how ministers can apply for extra cash to help with contingency planning.
Earlier today, Hammond told the Treasury Select Committee funds would not be handed over until “the very last moment” – despite the fact £250million has already been set aside.
At Prime Minister’s Questions shortly after the Chancellor’s appearance, May was asked to confirm “that all monies necessary will be allocated as and when required” to prepare for ‘no deal’.
May replied: “We are committing money to prepare for Brexit, including a no deal scenario.”
She added: “The Treasury has committed over £250million of new money to departments like Defra, Home Office, HMRC and DfT in this financial year for Brexit preparations, and in some cases departments will need to spend money before the relevant legislation has gone through the House.
“I can tell the House that the Treasury will write to departments and the Public Accounts Committee explaining this process shortly.
“So, where money needs to be spent, it will be spent.”
After Prime Minister’s Questions, a No 10 spokesman twice declined to answer if May’s announcement was a contradiction of Hammond’s position.
The Chancellor is becoming increasingly unpopular with pro-Brexit Tory MPs, with many seeing him as determined to water down or delay the UK’s exit from the EU.
Speaking on the BBC’s Daily Politics show this afternoon, Tory backbencher Bernard Jenkin said he “was very pleased to see the Prime Minister making absolutely clear” that departments would have the money they needed to prepare for ‘no deal’.
Asked by Andrew Neil if the Prime Minister had put Hammond in his place, Jenkin said: “She’s cleared up some of the ambiguity that the Chancellor left, yes, how can I put it more diplomatically than that?”
He claimed “there is a Treasury mindset” that is very “jaundiced” about Brexit, and that a more positive approach was needed.
In his appearance before the Treasury Select Committee this morning, Hammond said he was “not proposing to “allocate funds to departments in advance of the need to spend.”
He added: “We should look in each area at the last point at which spending can begin to ensure that we are ready for a day one, no deal scenario and that’s when we should start spending hard-earned taxpayers money, because every pound we spend on contingent preparations for a hard customs border is a pound that we can’t spend on the NHS or social care or education or deficit reduction.
“I don’t believe that we should be in the business of making potentially nugatory expenditure until the very last moment when we need to do so.
“We will be ready, we will spend the money in a timely fashion to ensure that we are ready, but we will not spend it earlier than necessary just to make some demonstration point.”
Hammond also claimed that a “cloud of uncertainty” over the outcome of the Brexit talks was “acting as a dampener” on the economy.
On the BBC, Jenkin hit back, saying: “Some of the mixed messages coming out of the Cabinet are the source of the greatest uncertainty.”