Theresa May has said a no deal Brexit “wouldn’t be the end of the world” as she played down Chancellor Philip Hammond’s warnings of major economic consequences.
The prime minister said the government was putting in place measures to ensure it can “make a success of no deal”.
But May said she remained confident the UK would be able to strike a “good deal” with the EU.
Speaking to reporters on her trade mission to Africa, May said Hammond was highlighting “work in progress” figures released in January when he published a letter just hours after the government started revealing its no-deal Brexit preparations.
The Chancellor was accused by Tory backbenchers of launching another “project fear” by referring to disputed provisional analysis which claimed GDP could fall and borrowing could be around £80bn a year higher by 2033/34 if Britain resorted to World Trade Organisation (WTO) terms.
Hammond said such an impact on GDP would have “large fiscal consequences”.
He also said this analysis was undergoing a “process of refinement” ahead of a parliamentary vote on any deal.
May, asked about the timing and content of Hammond’s intervention, said she had previously labelled the data as a work in progress.
She added: “Look at what the director of the World Trade Organisation has said.
“He said about a no deal situation that it would 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 preparations such that if we’re in that situation we can make a success of it, just as we will make a success of the good deal I believe we’re able to get and the good deal we’re working to get.”
May was also challenged on whether she would order her MPs to vote for no deal if her preferred approach – agreed following talks at Chequers – was not secured with the EU.
She replied: “I’ve said right from the beginning that no deal is better than a bad deal.
“I think it’s absolutely right that the government is putting the preparations in place for no deal because we don’t know what the outcome of this is going to be.
“But alongside that what we’re doing is working for a good deal.
“I believe what we’ve set out in the Chequers arrangement, set out in the white paper is a deal that benefits not just the United Kingdom but benefits the European Union as well.”
Eurosceptic Tories have criticised the government’s proposals, which include a “common rulebook” with the EU on goods, amid fears it could restrict the UK’s ability to do trade deals.
May also said the UK was working to secure a deal by October and within a timetable which meant Brexit could occur in March 2019.
On whether Tory MPs face a backlash from their local party associations for supporting a second EU referendum, the PM added: “I believe that what matters to local associations is what the Conservative government is delivering for them – and what we’re delivering is what the people voted for.”
May also reiterated the UK government’s desire to end free movement is “non-negotiable”.