Chancellor accused of launching ‘dodgy project fear’ over no deal
Hammond warns that no deal Brexit could cause economic damage
Cabinet Office Minister David Lidington has defended the Chancellor, Philip Hammond, over accusations he launched another “dodgy Project Fear” with warnings that a no-deal Brexit could cause major economic damage.
Brexit-backing Tories reacted furiously after Mr Hammond, in a leaked letter to Conservative MP Nicky Morgan, pointed to provisional analysis which claimed GDP could fall and borrowing could be around £80 billion a year higher by 2033/34 under a no-deal scenario.
Mr Lidington, said the data was “nothing new” and Mr Hammond was “absolutely committed” to the objectives that the Government had set outinthechequersagreement.
He said: “This is provisional analysis that the Treasury published back in January this year and I think all Philip was doing was simply referring back to that in response to a senior member of Parliament.” Mr Hammond’s comments emerged hours after Brexit Secretary Dominic Raab attempted to play down the likelihood of a nodeal Brexit while outlining the impact of such a scenario via a series of technical papers.
Mr Lidington later said that a no-deal was “not a desirable objective” and said he was “optimistic” the UK could achieve a deal.
When asked about International Trade Secretary Liam Fox’s assessment that the chance of a no-deal Brexit was 60/40, Mr Lidington responded: “I am not a betting man. I remain both determined and optimistic about this.”
His comments came after the chief of the World Trade Organisation (WTO) said a no-deal Brexit would “not be the end of the world”.
But WTO director general Roberto Azevedo did warn that a no-deal would not be “a walk in the park either” and challenged the view that the UK could begin trading seamlessly on WTO terms after 29 March.
He said: “It will be very ambitious to have that kind of outcome.
“It is very unlikely that you’re going to have 100 per cent agreed outcome for all WTO members between now and March.”
Former European commissioner for trade Karel De Gucht, later said he believed a no-deal Brexit was “highly unlikely”.
He said: “In the end there will be a deal, whether this is a solution is quite a different question.
“I believe it will be a very vague deal and immediately afterwards start what is exactly in the agreement.
“Politically I think it’s highly unlikely that this process will end with a no-deal on 29 March.”
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