May says no-deal Brexit ‘not the end of the world’
Prime minister reiterates that leaving EU without a deal is preferable to a bad deal
Theresa May has undermined Philip Hammond’s warnings about the economic damage from a “no-deal” Brexit by suggesting that the Treasury’s forecasts are still “just a work in progress” and that such an outcome would not be “the end of the world”.
Last week Mr Hammond, the chancellor of the exchequer, released a letter suggesting that UK GDP could drop by a relative 8.8 per cent if the country left the European Union without an agreement — compared to staying in the bloc. The letter to Nicky Morgan, chair of the Treasury select committee, also suggested that borrowing could be £80bn higher in 15 years’ time under that scenario.
Speaking to reporters on the government’s RAF Voyager plane en route to Africa for a three-day trip, Mrs May played down the substance of that letter. “I understand the chancellor was talking about a set of figures that when they came out in January I actually commented . . . that they were just a work in progress at that particular time,” she said.
That letter was political dynamite because it was published just hours after Dominic Raab, Brexit secretary, tried to demonstrate that Britain was prepared for a no-deal scenario by releasing an initial 24 technical notices advising various industries on how to prepare.
The timing prompted accusations by Brexiters of sabotage by Mr Hammond, one of the most senior Remain-leaning ministers in the Tory government.
But in remarks that will infuriate the Treasury, Mrs May stuck to her line that no-deal is better than a bad deal. She cited the head of the World Trade Organization, saying that he had told her that leaving Brussels empty-handed would not be terminal: “He said that it would not be a walk in the park but it wouldn’t be the end of the world.”
The prime minister said she was confident that the government would get a good deal: “But of course it is absolutely right that as a government we make preparations for all potential outcomes.”
Best for Britain, an anti-Brexit group, responded to Mrs May’s remarks, saying: “We’ve has government ministers telling us all summer that no deal would be a disaster for the UK, but now the prime minister is back saying no deal is OK and better than a bad deal.”
“With every passing day it’s more obvious that they don’t know what they are doing, other than putting the future of our country at risk,” it said.
There have been mixed messages from ministers about the chances of a no-deal outcome, which many business leaders believe would be disastrous for the economy. Mr Raab said last week that it was “unlikely” but Liam Fox, trade secretary, has suggested that it is more likely than not at “60:40”.
Mrs May also said that Brussels would be to blame if a deal was not agreed by the original deadline of October.
The prime minister is on her first trip to Africa since becoming leader two years ago. On Tuesday, she is set to visit Robben Island, where former South Africa president Nelson Mandela was held for 18 years.
Mrs May, who is accompanied by a trade delegation, will also visit Nigeria and Kenya during her trip — and will meet the presidents of all three countries.