UK Chancellor Sees More Tax Cuts, Spending If Brexit Deal Reached

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Last Friday, the Financial Times reported that Philip Hammond, the Chancellor of the United Kingdom, said that he would be able to free up billions of pounds in additional public spending or tax cuts if the country can resolve its Brexit impasse.

This coming Wednesday, the British Chancellor is scheduled to announce a half-yearly update on the budget. It will come a day after the parliament is set to vote on the plan of Theresa May, the Prime Minister of the United Kingdom, for a Brexit divorce deal with the rest of the European Union.

In the interview with the Financial Times, Hammond said that the new official fiscal forecasts would reveal that the public finances were in better shape as compared to his last budget statement. He also said that he would have more than the 15.4 billion pounds of fiscal “headroom” that he has previously earmarked for possible spending.

He said that approximately 100 or so euro-sceptic Conservative Party MPs should support the deal of PM May regardless of whether she secures more concessions from the European Union in negotiations which are anticipated to continue this weekend.

The United Kingdom is scheduled to leave the European Union on the 29th of March. May has opened up the likelihood of a short delay, possibly until June, if her plan is turned down by the parliament, which threw out a version of it in January, next week.

During the announcement of Hammond about his most recent full annual budget plan last October, he also held out the possibility of higher spending if parliament supported the Brexit plans of the UK government.

Hammond played down the concerns of some Conservative MPs that the Northern Irish backstop – a guarantee that is sought by the European Union to avoid the reintroduction of a hard border with Ireland – could leave the United Kindom trapped in Brussels’ orbit permanently.

Hammond stated: “There is nobody in the EU I’ve ever come across who thinks the UK could be held in perpetuity in an arrangement that was detrimental to its interests against its will.”

He added: “Who is going to enforce such an arrangement on this?”

Earlier last Friday, May called on the European Union to make “just one more push” to break the Brexit deadlock, however, the proposals from the chief negotiator of the bloc fell short of anything that would win over the British parliament.