Chancellor reveals £250m has been allocated for EU withdrawal preparations
Philip Hammond has indicated he is ready to spend large sums to get Britain ready for a "no deal" Brexit, as it emerged that £250m has already been allocated for EU withdrawal preparations.
The Chancellor said there was a "need for speed" from the other 27 EU nations in agreeing a transition to the post-Brexit era, both to deliver certainty for businesses and to avoid wasteful government spending on contingency planning.
Delays in beginning talks on the future UK/EU trading relationship - following Brussels' insistence that the divorce deal must be settled first - were creating a "cloud of uncertainty" which was acting as a damper on the UK economy, he added.
Mr Hammond used an article in The Times to say that he was not yet ready to turn on the tap for spending on infrastructure, such as lorry parks at Channel ports, which may be needed if the UK and EU fail to reach an agreement by the official Brexit date of March 2019. Spending money now on Brexit preparations would divert cash away from priorities such as the NHS and social care and the investment may turn out to be unnecessary if talks result in a good deal, he said.
But Mr Hammond later told MPs that the Treasury was "prepared to spend when we need to spend" on contingency plans for "no deal" outcomes including a possible "bad-tempered breakdown" in negotiations.
The government would wait until the "last point" before committing funds, he added.