No deal Brexit would not be ‘the end of the world’, insists Theresa May

Theresa May - Image credit: Scott Heppell/PA

Crashing out of the EU without a deal would not be the "end of the world", Theresa May has insisted, as she dismissed warnings from the Chancellor, Philip Hammond.

The Prime Minister moved to play down warnings from the Chancellor that the UK could suffer a major economic hit in the event of a no-deal Brexit.

Theresa May made the comments as she travelled to Cape Town as part of a three-day trip to Africa.

Ministers have been ramping up preparations for leaving the EU without a formal agreement, including arrangements for stockpiling six weeks-worth of medicines.

Hammond last week warned that a no-deal departure could have “large fiscal consequences,” including £80bn-a-year higher borrowing by the mid-2030s.

But the Prime Minister cited the boss of the World Trade Organisation, Roberto Azevêdo, as she tried to allay any fears the Chancellor may have sparked among voters.

"Look at what the director general of the World Trade Organisation has said,” she told reporters as she flew to Africa for a three-day trade visit.

“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.”

She added: “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.”

Hammond had based his comments on Treasury forecasts from January this year, but May dismissed the analysis, saying: “They were a work in progress at that particular time.”

Ministers last week published 25 technical notices laying out advice to businesses, public bodies and the public on how best to prepare for the possibility of Britain leaving the EU without a deal in March 2019.

The ‘technical notices’ included warnings that card charges on the continent could rise, while Brits living in Europe could lose access to bank accounts and pensions.

They showed that the UK faced a swamp of extra regulation in the event of a no-deal Brexit and would need to negotiate with the EU to ensure key elements of crucial sectors can stay afloat.

Labour MP Owen Smith, of the pro-EU Best for Britain campaign, said: "We’ve had government ministers telling us all summer that no deal would be a disaster for the UK, but now the Prime Minister is back saying no deal is OK and better than a bad deal. 

"With every passing day it’s more obvious that they don’t know what they are doing, other than putting the future of our country at risk.

"Mrs May should just admit she and her ministers are out of their depth and ask the country to rescue them through a People’s Vote."