Image: Foreign and Commonwealth Office
Image: Foreign and Commonwealth Office

Chancellor Philip Hammond has promised £26.6 billion worth of spending and tax cuts if MPs vote to leave the European Union with a deal.

In the Spring Statement, Mr Hammond said the extra cash would boost the economy to offset the negative impacts of leaving the EU.

Stressing that the extra funding would only be available in a deal scenario, the chancellor warned that leaving without a deal would be a “significant” blow.

Mr Hammond said Tuesday’s vote to reject the Prime Minister’s deal left “a cloud of uncertainty hanging over our economy”. And on Wednesday, MPs voted to reject the option of leaving without a deal. Tonight (Thursday), MPs will vote again on whether or not to ask the EU for an extension to Article 50.

The Office for Budget Responsibility (OBR) said the economy by 1.2% this year, the slowest rate of growth since the financial crisis. It was revised down from its forecast of 1.6% made in October. In the coming years, growth is either expected to be level or ahead of previous expectations.

The OBR also reduced its government borrowing forecasts in each of the next financial years. By 2023/24, the government is expected to borrow just £13.5bn.