Hammond tells Boris and Hunt they must ‘be honest’ over Tory leadership pledge costs in blistering warning that No Deal Brexit will DESTROY his £26bn Treasury ‘war chest’
- Tory leadership contenders have been busy pledging billions for their policies
- Chancellor Philip Hammond warned No Deal would eat up his £26bn warchest
- Jeremy Hunt vowed corporation tax cuts and Mr Johnson public worker pay rises
Chancellor Philip Hammond has warned the free-spending Tory leadership contenders to ‘be honest’ about the cost of their bold plans for power, saying they risk destroying the party’s reputation for economic competence.
The frugal chancellor hit out at Boris Johnson and Jeremy Hunt after they both pledged billions of pounds for their favoured policies.
They have unveiled plans to pump cash into areas including education as well as for No-Deal planning, prompting a rebuke from the top money man.
But he hit out at their plans to use the ‘fiscal headroom’ build up by the Treasury, saying their plans ‘greatly exceed’ what has been saved.
He told the BBC: ‘My concern is that this Government has built up a reputation for fiscal responsibility and the British people have worked incredibly hard over a decade now to rebuild our public finances.
‘It’s very important that we don’t throw that away. We have to live within our means, people have to be honest about the consequences of either spending more money or of cutting taxes.’
Asked if the candidates were being honest, he added: ‘They need to be very careful setting out these ambitions.’
Philip Hammond (pictured today) delivered a withering response after Tory leader hopefuls pledged billions of pounds for their favoured policies
In a speech in London today (pictured), Jeremy Hunt said he would order the government to work on the assumption that there will not be a Brexit agreement
Tory front runner Boris Johnson has vowed to loosen the purse strings in Downing Street, with his Cabinet backer Matt Hancock saying today there was now ‘money available’
In a direct attack on the two candidates – both of whom are likely to remove him from his post and install a supporter – he added: ‘Whether it’s a leadership competition or a general election, there is always a temptation to sort of get into a bidding war about spending more and cutting taxes.
‘But you can’t do both and if we’re not careful all we end up doing is borrowing more, spending more on interest instead of on our schools and our hospitals and our police and delivering a bigger burden of debt to our children and our grandchildren.
‘I don’t think either of the candidates would want to do that, that is not what the Tory party is about, but we just need to sometimes stop and think about what we’re doing.’
Mr Hammond had earlier insisted the ‘fiscal firepower’ that has been stocked up would be needed entirely to counteract the effects of departing without an agreement.
Mr Hunt today vowed to put Whitehall on a war footing for No Deal as he unveiled a £20billion plan to brace for hard Brexit.
The Foreign Secretary said he would immediately order the government to work on the assumption that there will not be an agreement – and threatened to cancel all holidays for senior civil servants.
He insisted ‘turbocharging’ preparations for No Deal would send a message the EU that the UK is ‘willing and able’ to walk away if negotiations fail.
He also reiterated that he would go ahead with billions of pounds of cuts to corporation tax regardless of whether there was an agreement.
In a series of sharp swipes at Mr Johnson, Mr Hunt warned ‘belief’ and ‘rhetoric’ was no substitute for meticulous planning – and said it was wrong to minimise concerns about the potential impact of leaving without a deal.
Meanwhile, the Tory front runner has vowed to loosen the purse strings in Downing Street, with his Cabinet backer Matt Hancock saying there was now ‘money available’.
Mr Hancock said: ‘Now that there’s money available we need to show the public sector some love – they do a brilliant job for the country,
Mr Hammond insisted the ‘fiscal firepower’ that has been stocked up would be needed entirely to counteract the effects of departing without an agreement
‘People in the public sector need to be properly rewarded for the brilliant job they do.
‘Higher pay, not higher taxes, means a pay rise for everyone, including in the public sector.’
But writing on Twitter on Monday, Mr Hammond said the £26billion of headroom he had carefully built up to prepare for Brexit was not something that could be relied on for pet policies.
‘The ‘fiscal firepower’ we have built up in case of a no-deal Brexit will only be available for extra spending if we leave with an orderly transition,’ he wrote.
‘If not, it will all be needed to plug the hole a no-deal Brexit will make in the public finances.’
Boris Johnson (pictured out campaigning in Orpington with Remain-backing brother Jo today) has vowed to loosen the purse strings in Downing Street, with his Cabinet backer Matt Hancock saying there was now ‘money available’