Fresh cabinet row brewing over Brexit

PUBLISHED: 12:11 26 August 2018 | UPDATED: 12:25 26 August 2018

Brexit secretary Dominic Raab has sparked a new row with the chancellor saying economic forecasts should be treated with caution 
Photo: PA / Peter Nicholls

Brexit secretary Dominic Raab has sparked a new row with the chancellor saying economic forecasts should be treated with caution Photo: PA / Peter Nicholls

PA Wire/PA Images

Dominic Raab has sparked a new cabinet spat with Philip Hammond after questioning the worth of economic forecasts days after the chancellor warned of the grave consequences of a no-deal Brexit.

The Brexit secretary said projections should be treated with “a measure of caution” adding that GDP estimates for 2019 “have been revised up”.

Hammond was accused of launching a “dodgy Project Fear” after warning GDP could fall and borrowing could be around £80 billion a year higher by 2033/34 under a scenario in which Britain resorted to World Trade Organisation (WTO) terms.

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.

Hammond’s comments in a letter to Conservative MP Nicky Morgan, chairwoman of the Treasury Select Committee, emerged hours after 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.

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.

Meanwhile, a 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 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.”

ON Saturday a rally was held in Newcastle by Remainers calling for a second referendum on the final Brexit deal.

Sir Vince Cable, the Liberal Democrat leader, told the People’s Vote event that teenagers aged 16 and 17 should be allowed to take part in any second ballot.

The 2016 vote to leave the EU – which was for those aged 18 and over – was “imposed on young people to the loss of their futures”, he said.

Neither of the two main parties officially back a second referendum despite MPs from across the political spectrum joining with the Lib Dems to back a second poll on the final Brexit deal.

Sir Vince said told the crowds: “Some say a People’s Vote would cause aggro, all the lies of 2016 would be repeated. We need to anticipate that.

“We need an adjudicator who can look at what campaigners say and fact check them properly.

“Brexit has been imposed on young people to the loss of their futures.

“What I want to see when we have this People’s Vote is that 16 and 17 year olds are allowed to take part.”

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