Johnson Brexit policy will result in £90 billion hit to the public purse

July 5, 2019 3:35 PM

Nick Cott on the campaign trailThe Chancellor of the Exchequer has confirmed to the Liberal Democrats that the Government is already having to hold back £26-27 billion of fiscal headroom to deal with the disastrous impact of a No Deal exit from the European Union, and that even more than that will be needed. Furthermore, the Government's own analysis shows that a disruptive No Deal Brexit will hit the public purse by £90 billion as a minimum.

Commenting on the Chancellor Phillip Hammond's remarks, Liberal Democrats ppc for Newcastle North, Dr Nick Cott, said

"Boris Johnson plans to give a tax cut of £9bn to the richest ten percent, while at the same time robbing the Exchequer and public services of ten times that amount.

"Such a move is completely unjustified, out of touch, and demonstrates exactly the kind of priorities he intends to have as Prime Minister.

"The Liberal Democrats are the only political party committed to stopping Brexit, the ultimate anti-austerity policy. Only the Liberal Democrats will work to ensure everyone can access the opportunities new technologies bring, and that we have healthy competitive markets where power is not concentrated in the hands of a few."

Chuka Umunna MP. Liberal Democrats Spokesperson for Treasury and Business Issues asked Phillip Hammond MP in the House of Commons:

If the UK leaves the EU without a deal and he is still in his place specifically does he envisage there being enough fiscal headroom following that spending review to give that tax cut worth over £9bn to the top ten percent of earners. Surely that is wholly unjustified?

Mr Hammond replied - We've built up around £26-27bn of fiscal headroom and the purpose of having that headroom is precisely in order to protect he UK economy from the immediate effects of a possible No Deal exit.

But I have no doubt whatsoever that in a No Deal exit we will need all of that money and more to respond to the immediate impacts of the disruption of a No Deal exit, and that will mean that there is no money available for longer term either tax cuts or spending increases.

But let me go further. The Government's analysis suggests that in a disruptive No Deal exit there will be a hit to the Exchequer of about £90 billion. That will also have to be factored in to future spending and tax decisions