Philip Hammond 'prepared to quit' over Theresa May's plan for legacy spending spree

Posted On: 
18th June 2019

Philip Hammond is prepared to resign over Theresa May's bid to secure her legacy as Prime Minister by spending billions of pounds on public services, it has been claimed.

The Prime Minister and Chancellor.

The Press Association reports that relations between Number 10 and the Treasury have become so strained that the Chancellor is willing to quit rather than sanction the spending spree.

Mrs May is pushing for a £27bn boost to education spending in her final days in office, with the plans meeting fierce resistance from the Treasury.

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The Prime Minister has already made high-profile pledges on mental health support, and pressed ahead with a promise to slash carbon emissions to net-zero by 2050 despite a warning from Mr Hammond that it will cost the UK economy £1trillion.

A source told the Press Association that Mr Hammond was now prepared to "walk away" from the Government over the "frivolous" demands, fearing they could bind the hands of the next Prime Minister.

"Everyone knows this Government is coming to an end and ministers are desperately trying to shore up their legacy by splashing the cash," they said.

"Not only is it immoral to take away the choices of the next PM, it’s irresponsible  - especially as no-deal looms.

"There are times it’s reached boiling point with the Chancellor prepared to just walk away."

The source added: "No-one’s denying there are some spending pressures but these are decisions to be taken by a successor in the round - not wasted on frivolous vanity projects or an attempt to bind the hands of the next person by making three-year pledges on their behalf."

A source close to the Chancellor told PA he was "100% dedicated to getting on with the day job", while a Number 10 source acknowledged that schools still faced "budgeting challenges".

According to PA, Number 10 is urging the Treasury to draw on funds from the £26.6bn war chest set aside for a Brexit "deal dividend" at this year's Spring Statement.

Mr Hammond has already pledged that a full three-year government Spending Review will look again at departmental budgets "before the summer recess" and "reflect the public’s priorities between areas like social care, local government, schools, police, defence and the environment".

But he said the "deal dividend" would depend on MPs making sure Britain could "leave the EU with a deal and an orderly transition to a future economic partnership".