Philip Hammond has been accused of trying to “frighten the population” after warning that a no-deal Brexit could do major damage to the economy.
Former Brexit secretary David Davis lashed out at “bogus” forecasts from the Treasury after the Chancellor suggested that GDP could fall and borrowing could be around £80 billion a year higher by 2033/34 if the UK resorted to World Trade Organisation (WTO) terms.
In an op-ed in the Sun on Sunday he said that Mr Hammond was being “either spectacularly incompetent, or deliberate”, adding: “I know what I think.”
It was an attempt to frighten the population into imagining the most terrible consequences of leaving the European Union without a dealDavid Davis
Mr Davis’s intervention came as his successor as Brexit Secretary, Dominic Raab, suggested some fiscal projections needed to be treated with “a measure of caution”.
Writing in the Sun, Mr Davis, who quit in protest at Theresa May’s Chequers deal, said the Chancellor’s estimates, outlined in a letter to Treasury Committee chairwomen Nicky Morgan, came from a “Treasury that has trouble forecasting deficits even 12 months ahead”.
He added: “It was an attempt to frighten the population into imagining the most terrible consequences of leaving the European Union without a deal.
“And even more disgraceful, by doing so it will undermine the Government’s hand in striking a deal with the EU.
“If they do not think we dare walk away, then they will give us the worst deal they can think of.
Bear in mind that the Chequers deal already concedes enormous amounts to the EU.”
Mr Hammond’s comments emerged hours after Mr Raab had attempted to play down the likelihood of a no-deal Brexit while outlining the impact of such a scenario via a series of technical papers.
Mr Hammond on Thursday was accused of launching a “dodgy Project Fear” with his letter.
The Chancellor said that his initial January analysis on GDP and borrowing was undergoing a “process of refinement” ahead of a parliamentary vote on any deal, noting scenarios which have higher barriers to trade with the EU are expected to have a “more damaging effect” on the economy and public finances.
He also defended the Government’s preferred approach, which was outlined in a white paper following a Cabinet summit at Chequers, by saying the economic and fiscal impacts of this would be “substantially better” than no deal.
Mr Raab risked a Cabinet row with Mr Hammond after questioning the worth of economic forecasts about Brexit.
In an interview with the Sunday Times, the Brexit Secretary said that GDP estimates for 2019 “have been revised up”.
Without naming Mr Hammond, Mr Raab told the Sunday Times: “I’m always chary of any forecast because most of them have been proved to be wrong.”
The newspaper also claimed that the Cabinet will meet to discuss no-deal Brexit preparations over fears that a row between Brexiteers and Remainers was undermining negotiations with Brussels.
Meanwhile, former European Council president Herman Van Rompuy warned that a no-deal Brexit could cause the United Kingdom itself to collapse.
The ex-Belgian prime minister told the Observer that crashing out without a deal was an “an existential threat to the UK itself”.
He added: “We could end up with a situation in which the EU27 becomes more united and a United Kingdom less united.
“This talk about a ‘no deal’ is the kind of nationalist rhetoric that belongs to another era.”