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Chancellor Philip Hammond today warned there would be a £90 billion hit to the Treasury if Britain plunges out of the EU without a deal.
He told MPs that the country could be rocked by a huge economic blow if Boris Johnson, or Jeremy Hunt, whoever becomes prime minister, goes for a crash-out from the bloc at the end of October.
He stressed that this could force the new prime minister to tear up tax and spending promises made during the leadership contest.
Speaking in the Commons, Mr Hammond said: “The Government’s analysis suggests that in a disruptive no-deal exit there will be a hit to the Exchequer of about £90 billion — that will also have to be factored into future spending and tax decisions.”
He made clear many MPs in Parliament would seek to block a no deal.
Mr Johnson’s allies today attacked Mr Hunt’s “do-or-dither” position on quitting the European Union. They sought to portray the Foreign Secretary as a “flip flopper” over the date of Brexit, suggesting the EU would welcome him as “Theresa May in trousers”.
However, former Chief Whip Sir Patrick McLoughlin hit back against the attack on Mr Hunt by Mr Johnson’s campaign chairman Iain Duncan Smith, arguing that it showed the Boris camp was “rattled”.
The Tory big beasts locked horns as Conservative HQ prepared to send out ballot papers to party members later this week to elect their new leader.
Former party leader Mr Duncan Smith said: “If you want to leave on October 31… Boris Johnson is the only person who absolutely swears that he will deliver that rather than messing around, or flip-flopping around different dates,” he told Sky News.
He later told LBC radio: “The truth is there is a choice — who do you believe is most likely to get you out on October 31, one way or the other — do-or-dither or do-or-die?”
Mr Hunt has said he is prepared to leave the EU without a deal but has warned of the economic harm it could inflict on the UK and has stopped short of putting a firm deadline for Brexit of October 31. He has instead said that he would seek a new agreement and assess the situation in September to decide whether this was achievable, and if it was not would go for no deal.
Mr Hunt won the backing of former Tory leader Lord Hague today.
But Mr Duncan Smith said: “The choice is quite clear, William [Lord Hague] does not seem to have picked this one up, that you either leave on October 31 as Boris says… if we faff around, offering extensions, fiddling around, then the EU will just rub their hands and say, ‘no problem boys, this is Theresa May in trousers, business as usual’.”
Responding to Mr Duncan Smith, Sir Patrick McLoughlin said: “This just shows they are rattled by the momentum of Jeremy’s high-energy campaign. Language like this is no way to unite the party or the country.”
Mr Hunt has branded October 31 a “fake” deadline, with Parliament having voted to block a no-deal departure. Today he described Mr Johnson’s Brexit deadline as “absolutist”, during a hustings in Belfast. He told the gathering he had always had misgivings about the backstop but decided “as a loyal Foreign Secretary” to keep his views private.
Asked which Game Of Thrones character he would choose to be, Mr Hunt, a fan of the show, chose hero Jon Snow.
Some economists now believe Britain’s economy will have shrunk in the second quarter of the year as companies shelved investment amid the Brexit uncertainty.
New figures showed the construction industry suffered its worst month in more than 10 years in June. The IHS Markit/CIPS construction Purchasing Managers’ Index (PMI) plunged to 43.1, the lowest reading since April 2009 and far worse than the City’s expectation of 49.3. A figure below 50 means the sector is shrinking.
