Theresa May slaps down Chancellor and approves £250m for no-deal prep

THERESA MAY yesterday turned on the spending taps to prepare for a ‘No Deal’ Brexit – as furious Tories accused the Chancellor of refusing to act.

The Prime Minister told the Commons that £250 million was being handed to departments such as the Home Office and HM Revenue & Customs.

And she vowed: “Where money needs to be spent, it will be spent.”

It came after Philip Hammond enraged Brexiteers by writing in the Times that he would only approve spending on a ‘No Deal’ when it was “responsible” to do so.

Speaking to a cross-party committee yesterday morning, he insisted he didn’t want to “waste” money preparing for the UK crashing out of the EU in March 2019 when there was still a chance of a deal with Brussels.

He added to the fury of Eurosceptic Tories by saying it was “theoretically possible” all flights between the UK and the EU could be suspended on Brexit Day without an agreement.

Jubilant Brexit-backing Tories said the PM put the ex-Remain campaigning Chancellor “in his place”.

One said: “It’s a slap down – pure and simple.”

Arch Eurosceptic Iain Duncan Smith said: “The PM’s clear statement that all monies necessary will be spent clears up any ambiguity.”

The Treasury told the Sun two days ago that no money had yet been allocated for a ‘No Deal’ scenario after demands from pro-Leave Cabinet Ministers for billions to be found.

Mr Hammond yesterday signalled that Downing Street had forced a rethink by telling the Treasury Select Committee that the £250 million had been allocated. This will now have to be accounted for in next month’s Budget.

The Chancellor said more money could eventually be spent on beefing up customs and infrastructure given the possibility of a “bad tempered breakdown in negotiations”.

But he said he wanted to wait until the last possible moment before splashing the cash – explaining: “Every Pound we spend on contingent preparations for a hard customs border is a £ we can’t spend on the NHS or deficit reduction.”

Brexiteers have argued for the past year that the Chancellor is doing all he can to hinder Brexit – a claim he vehemently denies.

Yesterday Mr Hammond urged the EU to realise a ‘No Deal’ would cause economic pain for both the UK and the entire EU bloc.

And he called on the EU to agree to an interim, transition phase that extends the “status quo” for a further two years by December. Treasury officials fear foreign banks will begin to move staff out of London early next year without a transition in place.

Mr Hammond said: “Our European partners need to think very carefully about the need for speed in order to protect the potential value to all of us having an interim period that protect our businesses and citizens and allows investment and normal business activity – contracting and so on – to carry on.”

Theresa May yesterday admitted that a transitional deal could see the UK forced to abide by the EU’s Common Fisheries Policy until 2021 – setting up a potential row with Environment Secretary Michael Gove.

The former Vote Leave chair Michael Gove earlier this week demanded Britain pull out and repatriate fishing policy immediately after Brexit.

He said it would be untenable for Brussels to set fishing quotas incorporating our waters while Britain no longer had any say in setting them.