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| Philip Hammond admits Brexit 'no deal' will mean less money for NHS and social care | Philip Hammond admits Brexit 'no deal' will mean less money for NHS and social care |
| (35 minutes later) | |
| A “no deal” Brexit will mean less money for the struggling NHS and for cash-starved social care, the Chancellor has admitted. | A “no deal” Brexit will mean less money for the struggling NHS and for cash-starved social care, the Chancellor has admitted. |
| Philip Hammond also became the first Cabinet minister to say it was “theoretically possible” that crashing out of the EU without agreement would ground all flights. | Philip Hammond also became the first Cabinet minister to say it was “theoretically possible” that crashing out of the EU without agreement would ground all flights. |
| Giving evidence to MPs, he said he did not think “anybody seriously believes that it where we will get to”, arguing an air travel deal would be struck regardless. | Giving evidence to MPs, he said he did not think “anybody seriously believes that it where we will get to”, arguing an air travel deal would be struck regardless. |
| But he made clear the financial cost to hard-pressed public services of preparing for the Brexit talks collapsing, something Theresa May has said the Government is now doing. | |
| “Every pound we spend on contingent preparations for a hard customs border is a pound we can't spend on the NHS, social care, education or deficit reduction,” the Chancellor said. | |
| The warning comes just one day after the head of the NHS said the health service would be forced to make cuts without a bailout in next month's Budget. | The warning comes just one day after the head of the NHS said the health service would be forced to make cuts without a bailout in next month's Budget. |
| A gloomy Mr Hammond said a “bad-tempered breakdown” in the negotiations was now a realistic “worst case scenario”- with “non-cooperation & people not acting in own economic interest” | |
| The Chancellor confirmed he was not ready to spend billions of pounds of taxpayers' money yet on preparing for a "no deal" departure. | The Chancellor confirmed he was not ready to spend billions of pounds of taxpayers' money yet on preparing for a "no deal" departure. |
| And he revealed he had faced down some colleagues who wanted him to start spending now in order to “send message to EU that we mean business” – but did not name any. | And he revealed he had faced down some colleagues who wanted him to start spending now in order to “send message to EU that we mean business” – but did not name any. |
| On Northern Ireland, the Chancellor appeared to open up the prospect of terrorists targeting new infrastructure at or near the border – despite the Prime Minister ruling out a hard border. | |
| He acknowledged that “cameras” could be required to carry out number plate recognition for a new customs regime – that would “need protection” from Irish extremists. | |
| Only if the UK and EU were able to agree a streamlined customs process to allow vehicles to “move freely” would we “have our answer”, he told the MPs. | |
| The Chancellor promised "we will be ready” for a no deal Brexit, on March 30, 2017, but immediately added: “Not everything will be in place on day one.” | |
| He also turned his fire on the EU for failing to start talks on a transitional deal, saying he was “astonished” by the approach from Brussels. | |
| The EU has ruled out agreeing this month that “sufficient progress” has been made on the financial settlement, citizens’ rights and the Irish border, allowing trade talks to begin. | The EU has ruled out agreeing this month that “sufficient progress” has been made on the financial settlement, citizens’ rights and the Irish border, allowing trade talks to begin. |
| But Mr Hammond urged the EU to start “exploratory discussions” on transition, adding: “They need to think carefully about the need for speed.” | But Mr Hammond urged the EU to start “exploratory discussions” on transition, adding: “They need to think carefully about the need for speed.” |
| Speaking to the Commons Treasury select committee, he also admitted a “cloud of uncertainty” caused by Brexit is dragging down the UK economy, as hopes of a deal with the EU appear to fade. | |
| Businesses and consumers were putting spending decisions on hold until they see if the negotiations in Brussels succeed or fade. | Businesses and consumers were putting spending decisions on hold until they see if the negotiations in Brussels succeed or fade. |
| For that reason, progress in negotiations needs to come “as soon as possible" to remove the drag on growth, the Chancellor said. | For that reason, progress in negotiations needs to come “as soon as possible" to remove the drag on growth, the Chancellor said. |
| The comments came after the UK was the only major economy not to see its growth forecast upgraded in an International Monetary Fund (IMF) report. | The comments came after the UK was the only major economy not to see its growth forecast upgraded in an International Monetary Fund (IMF) report. |
| The organisation predicted growth would slow from 1.8 per cent in 2016 to 1.7 per cent this year and 1.5 per cent in 2018. | The organisation predicted growth would slow from 1.8 per cent in 2016 to 1.7 per cent this year and 1.5 per cent in 2018. |