By Beth Rigby, political editor

It was back in 2017, during the snap election, that the prime minister risked the wrath of millions of voters fed up with austerity when she told a nurse asking for a pay rise there was "no magic money tree that we can shake that can provide for everything that people want".

A deeply unpopular message at a time when Jeremy Corbyn's Labour Party was promising a post-election spending splurge; this prime minister wasn't going to risk her party's reputation of economic competence even if it put her at a disadvantage to anti-austerity Labour.

Image: Mrs May had said there was 'no magic money tree'

Two years on and her party hasn't just ditched economic competence but is disavowing it in a Brexit bidding war.

The Conservative party is hurtling to a no-deal Brexit that will damage our economy as the political imperative of quitting the EU comes - literally - at any cost.


Boris Johnson knows what he must do to take the crown, however wobbly it could become in the weeks after his coronation: keep promising the hard out on 31 October "do or die".

Image: Mr Johnson is promising income tax, stamp duty and national insurance cuts

Jeremy Hunt, the foreign secretary, meanwhile has flip-flopped over deal or no deal.

In May he had warned that no deal would spell "disaster" and was "not a solution" as he suggested it would require a general election.

Now he is insisting he will go for no deal and is prepared to see people lose their jobs in order to make sure the UK leaves the EU.

Ideological zeal has trumped economic reason among the party's 160,000 voting members - and Mr Hunt's conversion perhaps to no deal reflects that.

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The party is prepared to crash out of the EU in order to survive being eviscerated by the Brexit Party and will only accept a leader who will willingly join them in going over the cliff.

This is not the "sunny uplands" destination once promised.

It looks a lot bleaker than that.

Image: Mr Hunt says he will increase defence spending and cut corporation tax

Leaving the EU with no deal risks a two-year recession, the International Monetary Fund warned in April.

It forecast the UK economy could be 3.5% smaller than expected by 2021 if trade barriers were swiftly erected.

This week, Moody's ratings agency went further as it concluded a recession wasn't just a risk but now "likely" should the UK leave with no deal.

The government's own forecasts, released in November 2018, showed the economy shrinking by 8% in the event of a no deal.

Brexiteers, deeply suspicious of the Treasury, have disputed these particular figures, but the overriding consensus is that the impact of a no-deal Brexit ranges from bad to very bad.

As the soon-to-be-sacked chancellor looks on aghast as his colleagues chuck away the party's reputation for fiscal responsibility, his Labour counterpart John McDonnell is staring at an open goal.

And yet this act of economic self-harm is not where the Tories' new-found commitment to fiscal incompetence ends.

We are now in a surreal - almost unbelievable - situation where both Mr Johnson and Mr Hunt are on also on spending sprees.

The tax and spend commitments are piling up. On Team Johnson we have income tax cuts (£9bn); stamp duty cuts (£12bn); cuts to national insurance contributions (£17bn); education (£4.5bn) - that's more than £42bn before you even get to the showing public sector workers "some love" by giving them a pay rise (£25bn). That doesn't just require one magic money tree, it requires a forest.

Team Hunt isn't much better.

His pledge on lifting defence spending to 2.5% of GDP (£15bn); cutting corporation tax to 12.5% (£13bn); increasing the thresholds for national insurance contributions (£11bn if raised to £12,500), and cutting interest on student loans (£1bn) all adds up to £40bn.

And each time a pledge is made, both men have pointed to a "fiscal headroom" to fund the spending plans.

Mr Hammond insists that the 'spare' borrowing factored into the public finances must be used to offset the impact of a no-deal Brexit.

It is only with a deal that the £26.6bn for the year 2021/21 (although this was revised down to £15bn in June) should be used to increase spending or lower taxes. Instead it has already been spent many times over.

Image: The chancellor wants to use any spare cash to offset the impact on a no-deal Brexit

The chancellor this week tried to give his party a dose of economic reality, but the Brexit wing of the party has little time for him even when Theresa May had some power and patronage.

Now he's being completely ignored.

So when he warns that a no-deal Brexit could cost the economy £90bn, it falls on deaf ears.

Perhaps the Treasury is being too negative, but it is just foolish to discount the risk when the ratings agency and IMF are warning of the threat.

And as the soon-to-be-sacked chancellor looks on aghast as his colleagues chuck away the party's reputation for fiscal responsibility, his Labour counterpart John McDonnell is staring at an open goal as he prepares his general election attacks.

First, he can now say the Tory candidates' sudden enthusiasm for big ticket spending proves that austerity was a political choice and not an economic necessity. He can ramp up the nasty party rhetoric.

Second, it allows Mr McDonnell to turn the tables on economic profligacy. The Conservatives are never going to be able to throw accusations of fiscal irresponsibility at Labour after all of this.

Image: Tory leadership spending promises are proving to be an open goal for John McDonnell

Of course, Mr Johnson and Mr Hunt probably calculate that in the end they will never have to do any of it. They don't even know if they can get a Brexit deal or leave with no deal on 31 October - whatever they might say publicly.

Two men who would be prime minister, promising their electorate things they will probably never deliver.

Our ruling party has shifted into a parallel fantasy world of Brexit unicorns and magic money trees.

It might work for the Conservative membership, but the bigger question is will it work for the wider public: They'll need it to because we could well be heading into a general election.

Sky Views is a series of comment pieces by Sky News editors and correspondents, published every morning.

Previously on Sky Views: Hannah Thomas-Peter - What happened in Alabama is like an episode of The Handmaid's Tale