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Philip Hammond angers Brexiteers with dire no deal warnings

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philip hammond
British
Foreign Secretary Philip Hammond waits to deliver his speech
entitled “The UK’s Engagement of Asia and Singapore” at the S.
Rajaratnam School of International Studies on Friday, Jan. 30,
2015 in Singapore.

Wong
Maye-E/AP


  • Chancellor Philip Hammond publishes letter warning no
    deal Brexit would make the UK £150 billion poorer over 15
    years.
  • Hammond says leaving the EU without a deal would force
    the government to increase borrowing by £80 billion by
    2033.
  • Hammond published his letter just hours after Brexit
    Secretary Dominic Raab sought to calm fears over a no deal
    Brexit, claiming Britain would be better off in the long
    run.
  • Conservative Brexiteers react with fury to Hammond’s
    latest intervention.

LONDON – Chancellor Phillip Hammond has issued further
warnings over the economic harm of a no deal Brexit, warning that
leaving the European Union empty handed would make the UK £150
billion poorer over 15 years.

Hammond’s latest Brexit warning comes only hours after Brexit
Secretary Dominic Raab said that there would be “opportunities”
from leaving with no deal and that a no deal Brexit would
damage Britain only in the short term.

Hammond, who is often criticised of being pro-EU by pro-Brexit
Conservative MPs, released a letter to Treasury Select Committee
Chair, Nicky Morgan, estimating the potential cost of a no deal
Brexit.

In his letter, Hammond said the United Kingdom’s GDP would go
down by 7.7% over 15 years, and that the largest negative impact
would be felt in the North East and Northern Ireland.

“GDP impacts of these magnitudes, were they to arise, would
have large fiscal consequences. The January analysis estimated
that borrowing would be about £80 billion a year higher under a
no deal/WTO scenario by 2033-2034, in the absence of mitigating
adjustments to spending or taxation, relative to a status quo
baseline,” his letter said.

“This is because any financial saving is outweighed by the
indirect fiscal consequences of a smaller economy.”

The Chancellor also announced more Brexit impact studies were on
their way, and that further modelling had been done on different
economic sectors in order to understand which will be worst hit
by Brexit.

“Under a no-deal/WTO scenario, chemicals, food and drink,
clothing, manufacturing, cars, and retail were estimated to be
the sectors most affected negatively in the long run, with the
largest negative impacts felt in the northeast and Northern
Ireland,” the letter published on Thursday said.

Hammond’s letter reignites Tory Brexit war

Hammonds’ intervention triggered angry responses from Brexiteers,
who accused the Chancellor of deliberately overshadowing Brexit
Secretary Raab’s speech on the government’s no deal preparations.

Speaking to The Times, head of
the pro-Brexit grouping of Conservative MPs Jacob Rees-Mogg said:
“The treasury just can’t stand being humiliated. It was wrong
during the campaign and is even more wrong now. The fact is
neither the chancellor nor the Treasury wants to leave the EU so
they repeat themselves ever more noisily.”


Jacob Rees-Mogg
Conservative MP Jacob
Rees-Mogg

Reuters / Simon
Dawson


Hammonds predictions were further criticised by Conservative MP
Marcus Fysh, who tweeted: “[It] Seems the Cabinet
hasn’t yet bothered to sort out the Treasury’s sub standard work
I criticised nearly 6 months ago…This is proof it is nothing
but scaremongering and it’s shocking the proponents are still in
post.”

Meanwhile, The Telegraph reports that
both Theresa May’s office and Dominic Raab were furious with
Hammonds’ letter, claiming that it was not signed off by Downing
Street.

“This was a deliberate intervention by Philip, he knew exactly
what he was doing.”

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