Philip Hammond used his Spring Statement today to urge MPs to compromise on Brexit as he launched a savage assessment on the economic risk of ‘no deal’.
Speaking a day after parliament again voted down Theresa May’s withdrawal agreement, the chancellor said leaving the EU without a deal would increase unemployment and food prices, and drive down wages.
While the Treasury has built up a £26bn fund to tackle the implications of no deal, Hammond warned there was no “simple fix” to mitigate any economic turbulence.
The sobering assessment came just hours before MPs were due to vote on whether the government should pursue ‘no deal’ as a policy in light of what was the second defeat of May’s Brexit deal.
Hammond called for parliament to reject no deal, warning: “Leaving with no deal would mean significant disruption in the short and medium term and a smaller less prosperous economy in the long term than if we leave with a deal.
“Higher employment, lower wages, higher prices in the shops – that is not what the British people voted for in June 2016, which is why all of us have a solemn duty in the days and weeks ahead to put aside our differences and seek a compromise on which this House can agree in the national interest.”
The chancellor even suggested a softer Brexit could be negotiated, something which May has not put forward.
“Tonight, we have a choice: we can remove the threat of an imminent no-deal exit hanging over our economy,” said Hammond, adding: “Tomorrow, we will have the opportunity to start to map out a way forward towards building a consensus across this House for a deal we can, collectively support, to exit the EU in an orderly way.”
Speaking after the statement, a Treasury spokesperson attempted to play down the significance of the call for “consensus”, and deny it was a covert way of backing a permanent customs union with the EU – a policy backed by Labour.
The spokesperson said: “There have been numerous meetings across parties, in the House over the last few weeks and months, the Prime Minister has met the Leader of the Opposition, that’s happened at all levels.
“I think what he is referring to is the continuation, perhaps the intensification, of that process to try and find a way forward. This is, after all, urgent.”