Hammond told to turn Project Fear into No Fear

PHILIP HAMMOND was forced to tone down Treasury plans for a no-deal Brexit amid concerns that they bore similarities to “Project Fear”, Government sources have said.

On Thursday, the Government publishes the first of 84 technical documents outlining contingency plans in the event that the UK leaves the European Union without a deal next year.

But two Government sources told The Daily Telegraph that concerns had been raised in Whitehall about the “tone” of several Treasury documents.

Sections on the “current status” of arrangements with the EU were too “upbeat” while the implications of a no-deal Brexit were seen as “negative”. They have since been redrafted to ensure that they are more factual.

Treasury papers on a no-deal Brexit are thought to include reports on the impact it may have on financial services, VAT and state aid.

The news comes after a series of leaks suggesting there would be shortages of medicine, fuel and food within a fortnight of leaving the EU and claims that the Army would have to be on standby.

Tory MPS warned that the Government was taking a “kamikaze” approach to no-deal planning, handing a negotiating advantage to the European Union.

Dominic Raab, the Brexit Secretary, insisted the documents should be “serious and sober”, with officials rebranding them “project no fear”. He will be in Brussels today for talks with Michel Barnier, the EU’S chief Brexit negotiator, in a bid to make a breakthrough before an October summit.

During the 2016 referendum, David Cameron’s government was accused of orchestrating “Project Fear” after warning that Brexit would lead to a 3.5 per cent fall in GDP and an extra 500,000 people being unemployed.

The Telegraph understands that the publication of the most controversial papers is likely to be delayed until next month. A Cabinet source said about 15 papers need “further collective agreement” before being ready to publish.

Meanwhile, the Government published a series of slides presented to the European Union last month that warned Brussels against a “land grab” on the City of London.

The slides stated that if “mutual market access is lost”, any benefits that the EU enjoys by financial companies relocating to the Continent would be “more than offset by negative fragmentation and lost efficiency impacts”.

They warned that the UK could not simply be a “rule taker” after Brexit, because of the special status of the City in world finance. “It is important to find a mutually acceptable solution that encourages us to work together constructively, protecting financial stability, and respecting the principle of autonomous decision-making,” the document states.

The Telegraph also disclosed that Britain would give EU migrants a unilateral right to stay in the UK in the event of a no-deal Brexit amid concerns that not doing so would lead to labour shortages.

Leaked Cabinet papers state that Britain was taking the “moral high ground” by allowing EU migrants to have continued access to the NHS and benefits, guaranteeing their rights regardless of whether Brussels agreed to do the same for Britons living in Spain and other nations in the EU.

The papers highlight that much of the UK’S no-deal planning will rely “on the availability of existing labour” in the event of talks breaking down.

 NHS managers fear a no-deal Brexit would put services at risk and make it harder to stop disease spreading.

The BBC said last night a leaked email to Simon Stevens, the NHS England chief, from NHS Providers, claimed they’d had a lack of engagement with ministers. An NHS England spokesman said it was working with the Government on post-brexit scenarios.