Philip Hammond says he might vote against PM Theresa May’s successor if they decide to force a hard Brexit through parliament.
Britain’s Chancellor Philip Hammond has warned that a ‘no-deal’ Brexit could damage the country’s economy to the tune of £90bn ($113bn) over the next 15 years.
Hammond, effectively the most senior politician in the UK after Prime Minister Theresa May, told MPs that he could vote against any attempt by her successor to force through an exit from the bloc.
May is due to leave office once her Conservative party decides on her successor.
The leadership contest is currently down to two candidates; former Foreign Secretary Boris Johnson and his successor in the same role, Jeremy Hunt.
Both take a hardline of Brexit but Johnson has the support of most anti-EU MPs.
The UK is currently set to leave the EU on October 31, a seven-month delay on the original deadline in late March.
Britain’s economy is still struggling from the aftermath of the 2007 global economic recession and London can ill afford further strain on its finances.
Between April and June 2019, a survey by IHS Markit/CIPS showed that the UK economy shrunk for the first time since late 2012.
Worries over post-Brexit regulations and global trade tensions have forced Britain’s Purchashing Managers’ Index down to just 50.2 points, just above the no-growth level of 50.
According to manufacturing and construction date published earlier this week, the UK’s economy shrank by 0.1 percent in the second quarter of 2019.
Consumer borrowing also slowed to its lowest increase since 2014.
The sterling has also failed to recover after it plunged in the aftermath of the 2016 referendum result announcement.
Chris Williamson, chief business economist at IHS Markit, told Reuters that: “The latest downturn has followed a gradual deterioration in demand over the past year as Brexit-related uncertainty has increasingly exacerbated the impact of a broader global economic slowdown.”
No deal Brexit
As things stand, the UK is part of the single market and European Customs Union. This means goods and services between the UK and the EU are not subject to tariffs or any other tax.
If the UK leaves the EU without an agreement it must trade with the bloc with World Trade Organisation rules.
This means goods would be subject to tariffs and customs checks to and from the continent.
These excess costs would be added to the supply chain for imports and would result in delays in getting goods between the EU and the UK.
Some financial institutions, such as Bank of America, Barclays, Goldman Sachs and Morgan Stanley, have already shifted hundreds of billions of dollars of their assets to Dublin to serve their clients in Europe.