MNI POLICY: Parliament To Get Brexit Deal Analysis Before Vote

-Government Economists, Like BOE, To Issue Brexit Deal/No Deal Analysis

By David Robinson

     LONDON (MNI) - The UK parliament will be given ample opportunity to study

the likely impact of a withdrawal agreement with the EU before having to vote on

it, the country's finance minister told the cross-party Treasury Committee

Monday.

     The following are key points from Chancellor of the Exchequer Philip

Hammond's testimony on the 2018 Budget:

     --Hammond said that once a Brexit withdrawal agreement was completed

economists across government would complete a full analysis of its likely

impact. He pledged that Parliament would have "adequate time" to study that

analysis.

     "Until we know the final shape of any deal we will not be able to model

that deal with any precision," he said.

     Head of the Treasury Committee Nicky Morgan has called on both government

economists and the Bank of England to send the committee work on the impact of

any agreed deal and of no deal.

     Bank of England Governor Mark Carney previously informed the committee that

the BOE will also submit its analysis after negotiations with the EU are

concluded and before the parliamentary vote.

     --Hammond dangled to lawmakers the carrot of allowing higher borrowing and

boosting spending if the UK successfully concludes a Brexit withdrawal

agreement.

     In the event of an exit deal "I would expect confidence to return to the UK

very quickly," he said.

     He added that with a deal in place the Treasury would not need the headroom

it has given itself in relation to its fiscal mandate and that "we could choose

to allow borrowing to rise."

     The Office for Budget Responsibility forecasts showed the Chancellor had

GBP15.4 billion (0.7 per cent of GDP) of headroom against his fiscal mandate -

which is to get the structural budget deficit below 2 per cent of GDP in fiscal

year 2020-21.

     --Hammond insisted that City economists and others were wrong to say that

he had abandoned his longer-term fiscal goal of getting the Budget into surplus

by the middle of the next decade.

     That goal "hasn't been abandoned" Hammond said, but added he was pursuing a

balanced approach of supporting investment and spending while also aiming to

balance the books down the line.

     The OBR's assessment was that if Hammond had left spending plans unchanged

there would have been an average 0.6% of GDP improvement per year in the budget

deficit, which would have been sufficient to balance the budget by the 2023-24

fiscal year.

     --Hammond told the committee that next Spending Review, setting out total

expenditure and detailed departmental spending plans, would be unveiled in

Autumn 2019, again once the Brexit picture is, hopefully, clearer.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

[TOPICS: M$B$$$,M$E$$$,MFB$$$,MGB$$$]