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Brexit is giant elephant in Phil's "end to austerity" waiting room

Philip Hammond - Chancellor of the Exchequer

You must be exhausted — either by generating the thousands of hours of Budget 2018 analysis the UK's professional services firms have put out overnight, or by wading through it.

So I'll not keep you long.

Suffice to say that Brexit, the overarching context for this budget, and upon which everything else is contingent, barely features — either in the budget itself or the subsequent consulting commentary.

Elephants and rooms, eh?

In fact The Budget report dedicates two paragraphs to Brexit, and there are a couple of sideways mentions in terms of building European networks (seriously) and border management.

So, for the record, here they are:

2.17 Preparing for EU exit
The government is seeking a deep and special relationship with the EU, encompassing economic and security cooperation. The government is confident of getting a good deal, but has a responsibility to plan for all scenarios, including the unlikely event no mutually satisfactory agreement can be reached with the EU. The government, led by the Department for Exiting the European Union (DExEU), continues to refine these plans ahead of March 2019 and has published a series of notices so that businesses and citizens are prepared.

To support these preparations, the government has already allocated £2.2 billion to departments and devolved administrations. At Autumn Budget 2017, the government set aside a further £1.5 billion to be allocated for preparations taking place in 2019-20. The budget confirms an additional £500 million of funding from the reserve for 2019-20, meaning the government will have invested over £4 billion in preparing for EU exit since 2016. This funding will help departments manage pressures and contingencies arising from EU exit preparations which fall in the 2019-20 financial year, as well as ensuring that the UK is prepared to seize the opportunities available when we leave the EU.

Most pro-Leave economists have long given up on arguing for the benefits of Brexit, but the irony of putting over £4 billion aside to soften the inevitable blow is still breath-taking.

The truth is that the only sensible reading of Budget 2018 is through a Brexit prism. As the Office for Budget Responsibility, OBR, comments in its Economic and fiscal outlook, "We will adjust our assumptions as necessary for the eventual agreements on trade, migration, budget contributions and other issues.

"In the near term, it is worth emphasising that this forecast assumes a relatively smooth exit from the EU next year.

"A disorderly one could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances. The scale would be very hard to predict, given the lack of precedent."

And if the worst comes to the worst, we'll have to do it all again after an emergency Budget next March.

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