Philip Hammond predicts ‘deal dividend’ boost for economy

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Chancellor Philip Hammond has predicted a “deal dividend” which could fund tax cuts and public service spending once a Brexit deal is reached.

Mr Hammond’s forecast came as he called on Conservatives to stand “four-square” behind Theresa May as she enters the final weeks of negotiations ahead of a hoped-for deal in November.

In a scathing attack on Boris Johnson, the Chancellor dismissed the former foreign secretary’s Brexit proposals as “fantasy world” and said he does not believe he will ever be prime minister.

Mr Hammond acknowledged that the UK economy had been hit by uncertainty following the Leave vote in 2016.

“A ‘deal dividend’ which we will share, in line with our balanced approach, between keeping taxes low, supporting public services, reducing the deficit, and investing in Britain’s future.”

Mr Hammond said the Treasury was keeping sufficient “fiscal firepower” to hand to deal with any economic fallout from a no-deal Brexit.

But he urged Tories to unite to help Mrs May get a deal, saying: “Over the next few weeks we must stand together four-square behind the PM to get the best possible outcome for Britain.”

Conservative Party annual conference 2018
Chancellor Philip Hammond’s wife Susan Williams-Walker listens to his speech at the Conservative Party annual conference (Stefan Rousseau/PA)

Asked by the Daily Mail whether Mr Johnson could become prime minister, Mr Hammond said: “I don’t expect it to happen,” and suggested the former foreign secretary could not do “grown-up politics”.

He accused the flamboyant Brexiteer of having “no grasp of detail” on complex subjects like Brexit, suggesting his greatest achievement to date had been introducing the “Boris Bike” cycle scheme while London mayor.

The attack came as fault lines over Brexit were brutally exposed in Birmingham.

Mr Johnson used a Sunday Times interview to describe Mrs May’s Brexit policy as “deranged” and “preposterous”.

And the man who spearheaded the Leave campaign pointedly contrasted his position on Brexit with that of Mrs May, saying: “Unlike the Prime Minister, I fought for this.”

As Mrs May celebrated her 62nd birthday, Mr Johnson was pictured jogging through a field near his Oxfordshire home, in a photo apparently designed to mock the PM’s famous memories of “running through wheatfields” as a mischievous schoolgirl.

England v India – Fifth Test – Day Two – The Kia Oval
Boris Johnson will address an event on the fringe of the conference on Tuesday (Steven Paston/PA)

But his scheduled speech on the fringe of the gathering on Tuesday is the most hotly-anticipated event of the four-day conference, with widespread expectations he will use it to step up his assault on the PM’s plans.

In a round of broadcast interviews on Monday, Mr Hammond was repeatedly asked whether Mr Johnson could ever become prime minister, and stated several times: “I don’t believe that will happen.”

He told Sky News: “Of course, Boris is a big personality, nobody is denying that. What I’m saying is that the business of government is a process of attention to detail, follow-through, lots of hard work.

“It isn’t just about making flamboyant statements and big announcements, it’s about getting things done.”

Theresa May and Philip Hammond
Theresa May and Philip Hammond chat to apprentices during a factory visit in Birmingham (Darren Staples/PA)

“It isn’t about taking back control, it’s about fantasy world,” Mr Hammond told ITV’s Good Morning Britain, arguing that the EU had made clear that a Canadian-style FTA covering the whole UK was not on the table, as Northern Ireland could not be included.

“When you go into a negotiation you have to understand the position of the people you’re negotiating with,” the Chancellor told BBC Radio 4’s Today.

“It’s no good just ignoring it and banging your head against a brick wall.

“You have got to understand what their red lines are as well so you can try and find a landing ground you can both accept, which means a deal gets done.”

Mr Hammond, who supported Remain in the 2016 referendum, insisted that he believes in Brexit and thinks there is “a high chance” that a version of the Chequers plan will be agreed.

He told Radio 5 Live he was “not having sleepless nights” over the risk of a no-deal Brexit.

But he acknowledged the UK economy has suffered as a result of the vote to leave the EU, telling BBC One’s Breakfast: “Clearly there has been a hit to our economy through the uncertainty that the Brexit process has caused.

“Many businesses are sitting on their hands, frankly, waiting to see what the out-turn of this negotiation is before confirming their investment plans, and of course that has an impact on the British economy.”

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