Chancellor defended amid claims of ‘dodgy Project Fear’
CABINET Office Minister David Lidington has defended the Chancellor 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 Philip Hammond, in a leaked letter to Tory 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, speaking to BBC Radio 4’s Today programme, said the data was “nothing new” and that Mr Hammond was “absolutely committed” to the objectives that the Government had set out in the Chequers agreement.
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 no-deal Brexit while outlining the impact of such a scenario via a series of technical papers.
Mr Lidington later said that a nodeal 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 March 29.
He said: “It will be very ambitious to have that kind of outcome. It is very unlikely that you’re going to have 100% agreed outcome for all WTO members between now and March.”
Former European commissioner for trade Karel De Gucht, speaking to the Today programme, 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.”
Mr De Gucht said the transition period may have to be extended as what the UK was asking for in negotiations was “contradictory”.
He added: “What the UK’s asking for is in fact contradictory, they want to be out of the European Union, out of the internal market, no customs union but nevertheless they would like that the situation after 29 March is largely similar to the present situation.”
The Belgian said that these demands make the negotiation “extremely difficult”, adding: “It will certainly take more than the time that has been envisaged now.”