Government refuses to rule out emergency no-deal Brexit budget

The chief secretary to the Treasury has declined to rule out an emergency no-deal Brexit budget before 31 October, when the UK could crash out of the European Union.

Rishi Sunak refused to confirm whether the chancellor, Sajid Javid, would announce a further stimulus in an emergency budget before a scheduled no-deal departure. The prime minister, Boris Johnson, played down the likelihood of it last week.

On Wednesday, the government announced a £2.1bn funding boost for no-deal Brexit preparations to pay for the stockpiling of medicines, border officials and a major public awareness campaign about likely disruption. It was a move designed to show Brussels the UK is ready and willing to leave the bloc without a deal.

The chancellor usually gives the budget later in November or December. But the Telegraph has reported that Dominic Cummings, Johnson’s senior adviser, told aides to prepare for a budget in early October, just weeks before the scheduled Brexit date.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS) thinktank, has said a pre-Brexit budget would be an “extraordinarily bad idea”, coming before the government could judge what support the economy needed once it had left the EU.

Sunak told BBC Radio 4’s Today programme: “We will have a fiscal event in the autumn because we will need to have a spending review, and a spending review is what sets out all department spending plans for the next financial period.”

When pushed on whether this would take place before Brexit, Sunak said: “We’d like to give people certainty as soon as possible. Obviously we’re working, the chancellor and me, we’ve been in these jobs a few days, we’re working very hard on figuring the exact timing of that. Hopefully we’ll have something to say on that reasonably soon.”

Sunak also defended the huge no-deal Brexit expenditure announced on Wednesday.

“A lot of the money we’re spending is going to go on things we would need to spend anyway because we’re leaving the European Union, that means we’re going to be leaving the single market and the customs union. So of course that does mean changes to how we trade with Europe. So investments in things like our ports and our border infrastructure, our systems, getting companies ready for those changes. All of that is money that we should be spending anyway on those new arrangements,” Sunak said.

“At some point we will be leaving the European Union, hopefully by the end of October is our clear desires, so at some point we would have to do that campaign to get traders ready for the changes they’ll have to do.”

Sunak added: “Part of this money will be spent on getting them ready, getting them ready for the new trading procedures, getting them ready for what’s called an EORI number so they can fill out the forms they need to do [to move goods in and out of the EU]. Those changes will happen in any case, but we want to accelerate those preparations.”

The shadow chancellor, John McDonnell, described the spending as an “appalling waste” of taxpayers’ money that could have been spent on schools, hospitals and people.