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Philip Hammond Says Any Money Set Aside For A No-Deal Brexit Is Money Taken From The NHS

The UK chancellor says he'll only set aside funds for the worst-case Brexit scenario when it's absolutely clear negotiations with the European Union won't produce a deal.

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The UK's chancellor slapped down Eurosceptic Conservative colleagues this morning, insisting he won't set aside funds to prepare for no Brexit deal just to make a political point.

"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," Philip Hammond told the Commons Treasury select committee.

The chancellor said there could be a range of potential outcomes from the negotiations with the EU — including, in the worst case, a "bad-tempered Brexit" if the discussions break down completely.

It is theoretically possible that no agreement could, for example, result in air traffic between the UK and EU being grounded after Britain leaves the union, although Hammond was quick to add that nobody seriously believes it will come to that.

Hammond, the most prominent voice in Theresa May's cabinet for a "soft" withdrawal from the European Union, has been under pressure from colleagues who believe the UK should be making a show of preparing for the Brexit talks to end without a deal.

Some Tory Leavers argue that Brussels won't give ground on the negotiations unless it believes the UK is truly prepared to walk away from the talks without an agreement on its future relationship with the EU. They have urged the Treasury to set aside billions of pounds in the November Budget to begin preparing for that scenario, for example to set up a standalone customs regime.

But Hammond said he's not prepared to spend public funds on preparing for no deal until it's absolutely clear that the talks won't result in an agreement.

"We do have planning for all scenarios," Hammond told MPs on the Treasury committee on Wednesday morning, repeating an article he wrote for The Times. "I am committed to funding departments for the work they need to do in preparation."

But, the chancellor went on, "What I am not proposing to do is allocate funds to departments in advance of the need to spend.

"I don't believe that we should be in the business of making potentially nugatory expenditure until the very last minute we need to do so."

"We will not spend it earlier than necessary just to make some demonstration point," the chancellor added.

Theresa May was asked about the government's financial planning for the prospect of no deal at Prime Minister's Questions this afternoon.

Asked by Iain Duncan Smith, the MP and former Tory leader, whether "all monies necessary" will be made available to prepare for not getting a deal, May told the Commons the Treasury has committed £250 million of new money to help several departments undertake contingencies in this financial year. "Where money needs to be spent it will be spent," the prime minister told MPs.

That was welcomed by Brexit-supporting Tory MPs.

Great that @Number10gov confirms gov allocation of £250m for Brexit prep & UK is leaving the single market & customs union in 2019. #PMQs

Bernard Jenkin, a Tory MP and prominent Leave campaigner, told the BBC's Daily Politics show that May's comments had cleared up "ambiguity" in the chancellor's position on funding no deal.

But Hammond had mentioned the £250 million in funding in his testimony to the Treasury committee on Wednesday morning.

Alex Spence is a senior political correspondent for BuzzFeed News and is based in London.

Contact Alex Spence at alex.spence@buzzfeed.com.

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