Post-Brexit budget doubts of Welsh and Scottish ministers

It is unclear whether the UK government is planning for an emergency budget in the event of a no-deal Brexit, Welsh and Scottish ministers have said.

Last year the Chancellor Philip Hammond said the UK government will set a new budget if the UK exits without a deal.

But Welsh Finance Minister Rebecca Evans, who met Chief Treasury Secretary Liz Truss on Friday, said extra funding was not "open for discussion".

Ms Truss said ministers are ready to take action if necessary.

Scottish Finance Secretary Derek Mackay, who also took part in the meeting, said he did not "quite get" the sense from Ms Truss that an emergency budget would be held.

The meeting in Cardiff on Friday followed a further defeat for the prime minister's Brexit strategy in the House of Commons on Thursday night.

MPs voted against a motion endorsing the government's strategy by 303 to 258, with 66 Tory MPs abstaining.

Downing Street has insisted that Theresa May will press on with efforts to negotiate a revised Brexit deal with the EU.

The UK is set to leave the EU on 29 March 2019 - with or without a deal.

With just six weeks to go until Brexit day, the Welsh and Scottish finance ministers said they were not "reassured" by the chief secretary to the Treasury about plans for a no-deal departure.

Speaking after the meeting, Ms Evans said: "We looked specifically at whether or not there would be a full fiscal event, so an emergency budget, following the potential of a no-deal Brexit.

"The chief secretary thought that wouldn't be necessary because again she's very much focussed on the fact that a deal can be made.

"However, we believe that we need to be preparing properly for all eventualities," she added.

Asked whether there was any discussion of extra funding in the event of a no-deal funding, Ms Evans replied: "No, that wasn't open for discussion."

Derek Mackay, Scotland's finance secretary, also said: "The chancellor said there would be an emergency budget - I didn't quite get that sense from the chief secretary of the Treasury today."

The Welsh finance minister said the Welsh Government "certainly haven't made preparations within our existing budget" for the possibility of a no-deal Brexit.

"Of course, we have Welsh reserves but again we would need to be looking at funding over and above that from the UK Government to respond to the variety of scenarios that could result from no-deal," Ms Evans added.

Chief Secretary to the Treasury Liz Truss, said: "The government is working for the best outcome for the UK, but preparing for every eventuality.

"I was clear at today's meeting that the government stands ready to take appropriate action if necessary.

"As the chancellor has said to Parliament, the Spring Statement is not a fiscal event, but if the economic or fiscal outlook changes materially then it is always open to us to turn it into a fiscal event."