Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world” as she sought to downplay a controversial warning made by Philip Hammond last week that it would cost £80bn in extra borrowing and inhibit long-term economic growth.
The prime minister conceded that crashing out of the European Union without a deal “wouldn’t be a walk in the park” but went on to argue that the UK could make an economic success of the unprecedented situation if it proved impossible to negotiate a satisfactory divorce.
Her comments were designed to distance herself from pessimistic Treasury forecasts highlighted by the chancellor at the end of last week, predictions that incensed the Tory right and led to renewed calls from hard Brexiters for Hammond’s dismissal.
Speaking to reporters as she began a three-day trip to Africa, May cited and endorsed remarks about the Brexit situation made last week by Roberto Azevêdo, the director general of the World Trade Organisation, to justify a gentle rebuke of the chancellor.
The prime minister said: “Look at what the director general of the World Trade Organisation has said. He has said about the no-deal situation that it will not be a walk in the park, but it wouldn’t be the end of the world.
“What the government is doing is putting in place the preparation such that if we are in that situation, we can make a success of it, just as we can make a success of a good deal.”
The prime minister voiced her own reservations about the Treasury forecasts, saying she believed the chancellor was talking about figures dating back to January, adding “They were a work in progress at that particular time.”
She was a speaking a day after a cabinet split over the issue had appeared to open up when Dominic Raab, the Brexit secretary, said he was “chary” of economic forecasts on Brexit because previous warnings about the risks of quitting the EU have been proved wrong.
May also distanced herself from comments recently made by David Lidington, the cabinet office minister, who had suggested that the exit talks could drag on beyond the October summit to the end of the year because there was so much that had not yet been resolved.
The prime minister said “we are all working to the October deadline” because “from our point of view there is some legislation we have to get through parliament” in order to complete the UK’s exit for March 2019.
Last week Michel Barnier, the EU’s chief negotiator, said the talks could go on until November but May said the UK was working to the October deadline which “the EU originally spoke of”. She added: “What we are doing is just sitting down, getting on with the work.”
The prime minister provided no further detail on how negotiations with European leaders had developed over the summer, talks that included a bilateral between May and France’s president, Emmanuel Macron, visits to Nordic and Baltic states by foreign secretary Jeremy Hunt and a round of negotiations between Raab and Barnier.