Brushing aside Philip Hammond’s warnings last week, Theresa May has said that a no-deal Brexit “wouldn’t be the end of the world”.
The prime minister addressed the Treasury’s warnings that leaving the EU without a deal would cost £80 billion in extra borrowing and inhibit long-term economic growth.
Speaking to reporters as she began a three-day trip to Africa, May said: “Look at what the director general of the World Trade Organisation has said. He has said about the no-deal situation that it will not be a walk in the park, but it wouldn’t be the end of the world.”
“What the government is doing is putting in place the preparation such that if we are in that situation, we can make a success of it, just as we can make a success of a good deal,” she added.
When asked about Hammond’s forecasts, May said: “First off, as I understand, the chancellor was talking about a set of figures that, when they came out in January…[I said] they were work in progress at that particular time.”
Hammond’s comments came last week where he warned that leaving the EU without a deal would create a £80 billion hole in the public finances.
“Chemicals, food and drink, clothing, manufacturing, cars, and retail were estimated to be the sectors most affected negatively in the long-run, with the largest negative impacts felt in the north-east and Northern Ireland,” Hammond wrote.
Hammond’s letter was released as Dominic Raab, the Brexit Secretary, published several documents showing the UK is adequately prepared for a no-deal outcome, highlighting the rift in the UK government surrounding Brexit.
Keir Starmer, Labour’s shadow Brexit secretary said: “We are eight weeks out from the deadline for reaching an agreement. Ministers should be getting on with the job of negotiating a Brexit deal that works for Britain, not publishing vague documents that will convince no one.”
“A no-deal Brexit has never been viable and would represent a complete failure of the Government’s negotiating strategy.”