Philip Hammond: UK will be poorer under every possible form of Brexit

Posted On: 
28th November 2018

Britain will be poorer under every possible form of Brexit compared with staying in the European Union, Philip Hammond admitted today.

The Treasury is expected to say GDP will be 1% or 2% smaller in 15 years under the deal secured by the PM
PA Images

In comments likely to infuriate pro-Brexit MPs, the Chancellor said the “there will be a cost to leaving the European Union because there will be impediments to our trade”.

It comes as the Treasury prepares to reveal its economic analysis of the Brexit deal struck by Theresa May - comparing it with a no-deal Brexit and staying in the bloc.

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Mr Hammond said taking an economic hit from quitting the EU was inevitable since it “introduces some level of friction in our trade”.

Asked on BBC Radio 4 this morning if the UK would be poorer in every Brexit scenario, he said: “Yes you are right in that analysis.”

He added: “If you look at this purely from an economic point of view there will be a cost to leaving the European Union because there will be impediments to our trade.”

But he insisted the deal agreed by the Prime Minister “reduces to an absolute minimum the economic impact of leaving the EU whilst delivering us the political benefits”.

He said the agreement - which MPs are set to vote on in less than two weeks - was the “optimum way of leaving” the bloc and the economic impact would be “entirely manageable”.

But pro-Brexit Tory MP Jacob Rees-Mogg said Mr Hammond was missing “the opportunity Brexit offers to be more open to the rest of the world”.

He told PoliticsHome: “The EU’s tariff and non-tariff barriers are a major obstacle to our global trade.”

The Treasury forecast is expected to say UK wealth will be 1% or 2% smaller in 15 years’ time under the deal secured by the PM than it would if Britain remained in the EU, equivalent to £40bn in revenue.

But according to the Telegraph it will warn that a no-deal Brexit would leave GDP some 7.5% lower in 15 years than it would otherwise be, equivalent to a £150bn loss.

The draft withdrawal agreement - and the political declaration outlining plans for future trade with the bloc - are all-but certain to be voted down by MPs when they come before the Commons on 11 December.

MPs across the political divide, including some 90 Tories, argue the plans leave the UK too closely tied to EU rules and could create a regulatory border down the Irish Sea.


Elsewhere, Mr Hammond batted away calls for the Government to release in full its legal advice on the Brexit deal.

Labour has responded with fury after it emerged ministers could publish just a summary of the advice, despite having suggested to the Commons that MPs would get the full details.

But the Chancellor said: “It would be impossible for government to function if we set a precedent that the legal advice government receives has to be made public.

“We must have – as every other citizen in the country has – the right to take privileged legal advice which is private between the lawyer and the client, so that the client has the ability to ask the difficult questions, to receive full and frank legal advice and then to make decisions based on that full and frank legal advice.”