Hammond’s ‘doom and gloom’ forecasts a puzzle to Lord Lawson

PHILIP Hammond should account for why the Treasury’s Brexit forecasts envisage “doom and gloom” when separate analyses insist the UK economy will benefit from “strong positive growth”, Lord Lawson has said.

The former chancellor, who served under Margaret Thatcher and John Major, said it was “puzzling” that Whitehall forecasts use “the same model” as pro-Leave economists but come up with “wildly different results”.

The pro-Brexit Economists for Free Trade (EFT) group, which Mr Hammond claimed based its figures on assumptions “wildly out of line” with other economic models, challenged the Chancellor to an “open debate” at the Conservative Party conference.

Lord Lawson said: “The Treasury forecasts doom and gloom and negative growth from a Canadian or World Trade Organisation deal while the EFT see such deals as leading to strong positive growth. As always it depends

‘The EFT are doing a public service by proposing an open debate’

on the assumptions fed into the model. The EFT are doing a public service by proposing an open debate to get to the bottom of this mystery.”

An EFT paper says “pessimistic” Treasury modelling “assumes trade barriers will spring up between Britain and the EU” in the event of a Canadastyle deal or a no-deal Brexit.