Yahoo Finance Hammond delivers loaded warning to Boris Johnson in resignation letter
Britain’s chancellor Philip Hammond has handed in his resignation with a loaded warning to Boris Johnson, just hours before the former London mayor was officially confirmed as prime minister.
“Spreadsheet Phil” fired a parting shot at his party’s new leader in his resignation letter, saying he was handing his successor the potential “luxury” of choice over how to spend public money.
But he urged him to spend “wisely” and said such headroom was only possible if the UK government secures a Brexit deal with Brussels, in a thinly veiled attack on Boris Johnson’s willingness to consider a no-deal Brexit and loosen the purse-strings.
It is not the first time Hammond has urged caution over Johnson’s spending plans or a no-deal Brexit.
He has previously refused to rule out voting against his own government on the backbenches to stop a no-deal outcome, and has warned it could leave a £90bn dent in the public finances.
READ MORE: ‘Global goods could get cheaper after no-deal Brexit’
International development secretary Rory Stewart, justice secretary David Gauke and de facto deputy prime minister David Lidington also left their posts at the same time, walking out in a seeming bid to highlight their opposition to Johnson’s hard Brexit stance.
Business leader Rami Ranger, founder of Sun Mark and chair of Conservative Friends of India, tweeted his thanks to Hammond “for your immense contribution in stabilising the economy.”
It comes amid reports Sajid Javid is set to be appointed by Johnson to replace Hammond, who was widely seen by business leaders as a cautious, steady hand and voice for firms at Number 11 Downing Street.
Boris Johnson is set to be sworn in as prime minister later on Wednesday, with his cabinet top team also likely to be announced today as he prepares to take over from Theresa May.
I have just handed in my resignation to @theresa_may. It has been a privilege to serve as her Chancellor of the Exchequer for the last three years. pic.twitter.com/pcCkvKhQxj
— Philip Hammond (@PhilipHammondUK) July 24, 2019
Hammond wrote in his letter to Theresa May: “We bequeath to our successors genuine choices, once a Brexit deal is done: the ability to choose, within the fiscal rules, between increased public spending, reduced taxes, higher investment or progress towards faster debt reduction – or some combination of all four.”
But he said the new government would have to “choose wisely,” implying major spending and tax cut proposals by Johnson would only be possible if Johnson secures a deal.
Hammond claimed credit for delivering “a further 900,000 net new jobs on our watch,” as well as reducing public sector borrowing to “a fraction over 1% of GDP.
He has previously warned Britain would have to use all of its existing £27bn “fiscal headroom” within the government’s budget rules to offset the economic costs of a no-deal Brexit.
The warning was a rebuff to growing speculation Johnson and his rival Jeremy Hunt hoped to use the money to fund other public spending pledges whether or not Britain left without a deal.
Theresa May also urged Johnson to secure a Brexit that works “for the whole United Kingdom” in her final speech as leader shortly afterwards.
