Liam Fox tells Philip Hammond not to talk down economy in Autumn Statement

Posted On: 
30th October 2016

Liam Fox has fired a warning shot to Philip Hammond ahead of next month’s Autumn Statement, telling him to avoid "hyperbole” about the economic impact of Brexit. 

Philip Hammond was appointed Chancellor by Theresa May in July
PA Images

The International Trade Secretary, who was a leading advocate of leaving the European Union, said the Chancellor should not announce a major stimulus package and instead pursue a “steady-as-she-goes” policy.

The comments, reported in the Sunday Times and Sun on Sunday, are the latest clash between the two Cabinet ministers, who are also reportedly at odds over the priorities for the UK’s relationship with the EU in the future.

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Mr Hammond has discussed the need to “reset” fiscal policy since the referendum result and has already scrapped his predecessor’s target to return the public finances to surplus by the end of the decade, potentially paving the way for more investment spending to be announced.

But Mr Fox told Conservative colleagues the Chancellor should not overstate the impact of the referendum.

“There is no need for any economic stimulus in the Autumn Statement,” he said, according to the Sunday Times.

“The economy is in good shape. The last thing we need is a George Osborne-style emergency Budget. We want a steady-as-she-goes Autumn Statement.

“We need common sense not hyperbole and panic. There’s no reason to panic. If you go on a spending spree people will think there’s a reason to panic.”

Another Cabinet source weighed in: “All chancellors do a bit of talking-down to temper expectations. You soften the ground a bit so when it comes back stronger the surprise is on the upside. But any suggestion that we’re in a dark place and we need massive boosts would not be helpful.”