Chancellor says ‘nobody knows cost’ of no-deal Brexit

Chancellor Sajid Javid waits for a media interview at the Conservative Party Conference at the Manchester Convention Centre. Photograph: Stefan Rousseau/PA Wire. - Credit: PA

The chancellor has admitted he doesn’t know the true cost of a no-deal Brexit, but says he knows it will be ‘challenging’ if it happens.

https://twitter.com/BBCr4today/status/1178571699299725314

Sajid Javid did not dispute a report in July from the Office of Budget Responsibility that claimed the budget deficit could widen by £30bn from 2020-2021 onwards, but said nobody could be sure what the true cost the economy would be short-term.

He told Radio 4’s Today: “I don’t think anyone really knows a full proper answer to that question.

“And I have never pretended that if you leave without a deal it won’t be challenging.”

He also signalled that he has a plan to cut taxes or boost spending to protect the economy should there be a no-deal Brexit.

He said: “I’m also clear that, if it was no deal, there would be a significant economic policy response. You have the independent Bank of England that will almost certainly think about a monetary policy response, and that’s for them. But I will be thinking about a fiscal, and other economic policy, response.

Javid said it is still possible to leave the EU by that date, and that a no-deal Brexit could happen despite it not being the preferred outcome.

He said: “It’s not our preferred outcome, we are working incredibly hard to get a deal by October 31 and I absolutely believe that can still happen.

“But if we do not manage to do that, we do still need to leave the EU on that date – we cannot have any more dither and delay and we will leave if we have to without a deal on October 31.”

John McDonnell, Labour’s shadow chancellor said Javid “either has no clue or he is being completely disingenuous”.

“This morning the chancellor refused to say what the real costs of a no deal Brexit would be, or how it would impact on the economy.

“He either has no clue – or he is being completely disingenuous, because he knows what a disaster no deal would be for everyone except the super rich. His repetition of the word surrender is no substitute for grown up, sensible planning.”

Labour MP David Lammy tweeted: “How can the chancellor support a no-deal Brexit when even he admits he does not know the cost? The height of irresponsibility and a complete dereliction of duty.”