UK finance minister cautions PM candidates over no-deal Brexit and spending

By Kate Holton and Guy Faulconbridge

LONDON (Reuters) - Britain's finance minister on Thursday warned those in his party vying for Prime Minister Theresa May's job that a no-deal Brexit would threaten the United Kingdom's cohesion and that they should tone down irresponsible spending pledges.

May's departure deepens the Brexit crisis as a new leader, who should be in place by the end of July, is likely to want a more decisive split, raising the chances of a confrontation with the EU and potentially a snap parliamentary election.

Boris Johnson, the bookmakers' favorite to get May's job, has said the United Kingdom should leave the EU on Oct. 31 with or without a deal.

“We need to get the specter of a no-deal exit off the table,” finance minister Philip Hammond told the BBC. “Leaving with no deal would be a very bad outcome for the economy.”

“I'm not sure that people necessarily have understood what a risk we would be taking, not only with our economy but also with the future of our precious United Kingdom if we left with no deal,” Hammond said.

The United Kingdom was supposed to have left the EU on March 29 but its politicians are still arguing over how, when or even whether the country will leave the club it joined in 1973.

No deal means there would be no transition so the exit would be abrupt. Bank of England Governor Mark Carney said leaving the EU with no transition could be akin to the 1970s oil shock.

May's government has repeatedly warned of the disruption a no-deal Brexit would unleash on everything from pet tourism to the import of crucial medicines and supply chains that criss-cross Europe and beyond.

Brexit supporters admit there may be some short-term disruption but that in the long-term the United Kingdom would thrive outside what they cast as an undemocratic and excessively bureaucratic project dominated by Germany.

Eleven Conservative lawmakers have declared they are running for May's job.

When asked if he could be a candidate to succeed May, Hammond did not answer directly, but veered into a discussion about the national minimum wage. He said he was meeting with other candidates.

“My concern is to make sure that there is a voice in this competition representing the views that I hold: that we need to resolve the Brexit impasse in a way that protects our businesses and our jobs,” he said.

He did not say which candidate he would back.

“I hope this contest does not degenerate into a competition to see who can make the biggest spending or tax cutting pledges, he said. ”The Conservative Party has a very strong reputation, well deserved, for being fiscally responsible.

Hammond said that if a future government that was seeking to leave without a deal faced a confidence vote in the House of Commons, he would vote in what he felt was the national interest.

“I've been in parliament for 22 years and I have never once voted against the Conservative whip so it's not something I would do lightly or enthusiastically. But I am very clear that the national interest trumps the party interest,” Hammond told Sky News.

“If I am presented with a difficult choice I will act in what I believe is the best interest of this country.”