BRITAIN’S Budget will have to be binned if the UK crashes out of the EU without a deal, Chancellor Philip Hammond has conceded.
Hammond, who will set out his new Budget on Monday, admitted he will have to scrap the plan and start again if an agreement cannot be agreed.
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Speaking on Sky News on Sunday, he said: “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.
“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.”
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He went on: “We would want to see how markets and businesses and consumers responded to that.
“Then, as any responsible government would, we would take appropriate fiscal measures to protect the economy, to prepare us for the future and to strike out in a new direction that would ensure that Britain was able to succeed, whatever the circumstances.”
The Chancellor also hinted he will use Monday’s statement to provide additional funding to smooth the transition to Universal Credit amid widespread reports that low income families are being driven into debt after being switched over to the payments.
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.”
Shadow chancellor John McDonnell, who also spoke to Sky News, accused Hammond of “callous complacency” over the Budget.
Calling on other parties to vote down the Budget unless action is taken over Universal Credit, McDonnell said he was “really shocked” by the Brexit comments, adding: “He’s gone back to what he said some time ago, which is basically he seems to have accepted a no-deal Brexit and he does want us to be like Singapore, a tax haven which will undermine our manufacturing base and, I think, put people’s living standards at risk.”
He went on: “We’ve got to ensure that there is a deal and the best way of doing that is Theresa May negotiating a proper deal that protects jobs and the economy.
“And if she can’t do that she should step to one side because there’s too much at risk from a no-deal, and if she can’t do it herself, let Labour get on with the negotiations or let’s have that General Election and let the people decide.”
He added: “We’ve said time and time again, bring back a deal that protects jobs and the economy and, yes, of course we’ll support it.”
Meanwhile, Scottish Finance Secretary Derek Mackay told BBC Sunday Politics Scotland: “The Prime Minister said austerity is going to end and I’m saying to the UK Government ‘show me the money’.
“That means a substantial, meaningful uplift in addition to the health commitments, which I welcome, and it must not be offset by cuts elsewhere.”
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