On Wednesday, Philip Hammond, the British finance minister, talked about Brexit and the economy to the Treasury Committee in parliament.
Below are some of the highlights from the question-and-answer session during the talk.
PHILIP HAMMOND ON THE NEED FOR THE EUROPEAN UNION TO TALK ABOUT FUTURE TIES TO UNITED KINGDOM
“Astonishingly, the most important question, which is what is our long-term relationship with the European Union going to look like, has not yet even begun to be discussed … We have made the running in this and we really need our European Union partners to engage. It’s quite a small ask really. Let’s sit down around a table and have a chat. That’s all we are saying. We are not asking them to sign up. We are not asking them to write blank cheques. We are simply asking them to start talking to us because we are friends, we hope to remain friends in a comprehensive partnership arrangement. But when friends have an issue to resolve they sit down and talk about it. And I think people in this country are finding it increasingly difficult to understand why we can’t start talking about our the substance of our future relationship.”
PHILIP HAMMOND ON THE NEED TO SPEED UP A TRANSITIONAL DEAL
“It is self-evident to me … that a transitional arrangement is a wasting asset. It has a value today. It will still have a very high value at Christmas, early in the new year. But as we move through 2018 its value to everybody will diminish significantly. And I think our European partners need to think very carefully about the need for speed in order to protect the potential value to all of us of having an interim period…”
PHILIP HAMMOND ON SPENDING NOW FOR NO-DEAL BREXIT SITUATION
“I am clear that we have to be prepared for a no-deal scenario unless and until we have clear evidence that that is not where we will end up. What I am not proposing to do is to allocate funds to departments in advance of the need to spend … I don’t believe we should be in the business of making potentially nugatory expenditure until the very last moment when we need to do so.”
“Some are urging me to spend money simply to send a message to the EU that we mean business. I think the EU knows that we mean business … I don’t believe we should be in the business of making potentially nugatory expenditure until the very last moment when we need to do so.”
“I am clear that at the moment, the areas where we need to spend money – I have already authorised 250 million pounds of expenditure – there will be a rolling programme. There will be some areas where we need to start spending money in the new year if we can’t tell ourselves that we are moving steadily and pretty assuredly towards a transition agreement.”
PHILIP HAMMOND ON THE ECONOMY OF THE UNITED KINGDOM
“The IMF report yesterday showed the UK figures for ’17 and ’18 unchanged from their July report. It’s true, that’s against the backdrop of increases that were posted for many other countries around the world.
“I think it reflects a sense that while the UK economy is fundamentally strong and in good shape, we are being affected by uncertainty around the negotiation process that we are engaged in at the moment. I think there is plenty of anecdotal evidence that businesses and consumers are waiting to see what the outcome is, or at least what the direction of travel is, before firming up investment decisions, consumption decisions.”
PHILIP HAMMOND ON BREXIT AND THE ECONOMY
“My general view of our economy is that it is fundamentally robust. We have some very strong things going for us, a strong outlook for the future. But the cloud of uncertainty is a temporary damper and we need to remove it as soon as possible by making progress with the (Brexit) negotiation process.”