Hammond is in trouble with the Brexiteers (HERE). Blurting out the truth isn't what they want but credit to him, he did it in a letter to the Treasury Select Committee (HERE). In a no deal scenario, the government would be forced to borrow an extra £80 billion by 2033-4. He didn't mention raising taxes but since borrowing is only deferred taxation, that's what it is. Ominously for Brexiteers, the Treasury is undertaking what Hammond calls a "refinement" of the gloomy forecasts. Since the Treasury is akin to the Antichrist for Brexiteers the idea the forecasts will be less gloomy may be wishful thinking.
Dominic Raab, answering questions yesterday after his speech launching the first 25 technical papers, said Britain would be "better off" under all scenarios outside the EU - he only got away with this by adding, "in the longer term". This is the opposite of what The Treasury forecast in the cross Whitehall briefing circulated secretly in January this year (HERE - see page 16), but cabinet ministers are at open loggerheads so this is the new normal. Brexiteers say the Treasury figures are only a forecast and they might be wrong. That's true, but at least they're based on evidence and are only 15 years ahead, Raab's are even further out and based on - well, nothing more than hope.
Politics Home (HERE) quotes Jacob Rees-Mogg saying, "As a dog returneth to his vomit, so a fool [Phillip Hammond] returneth to his folly". This is his own government's chancellor. One is tempted to wonder how long the fragile "unity" of the Conservative party can last?
On a slightly different but related topic, to really appreciate the lack of understanding in the mainstream media, note this piece in The Guardian (HERE) where Phillip Hammond's letter to Nicky Morgan, chair of the Treasury Select Committee, is said to suggest, "the hit to economic growth if Britain left without a trade deal would force the Treasury to borrow an extra £80bn over the next decade."
But when you read the letter which is available on the Treasury website HERE it's quite unequivocal that the hit to government revenues is "£80 billion a year" - in other words ten times as much! And The Guardian is anti Brexit! No wonder we're in an almighty mess.
