Philip Hammond has admitted the UK would be better off if it remained in the EU, saying the economy will be “slightly smaller” under Theresa May’s Brexit plan.
Hammond’s warning came as the Government prepared to set out its analysis of the economic impact of Brexit on Wednesday.
Speaking to BBC Radio 4′s Today programme, Hammond said in “purely economic sense” it would be better for the UK not to leave.
“The economy will be slightly smaller in the Prime Minister’s preferred version of the future partnership,” he said.
Downing Street said the economic papers published will cover a “range of scenarios”.
The Treasury analysis is expected to conclude the UK will be far better off under the terms of May’s agreement with Brussels than if it left with no deal.
May will travel to Scotland later today for another day of campaigning as she appeals over the heads of MPs to ordinary voters to support her plan.
Having spent Tuesday campaigning in Wales and Northern Ireland, the PM will use her visit to Scotland to argue that agreement offers the prospect of an “unprecedented economic partnership” with the EU after Brexit.
The Commons is due to vote on May’s Brexit deal on December 11 – and at the moment looks highly likely to reject it.
Scores of Tory MPs having declared publicly they will vote against the deal, and Labour and the other opposition parties also firmly opposed.
Ministers have acknowledged the parliamentary arithmetic is “challenging”.
They are expected to use the next two weeks arguing there is no Commons majority for any of the alternative proposal being touted round Westminster – and that May’s plan remains the only alternative to the chaos of a no-deal break.
Five former Cabinet ministers and Jacob Rees-Mogg have written to May to warn her she is heading for a no deal Brexit unless she changes course.
In an open letter published by HuffPost UK, ex-Tory leader Iain Duncan Smith, David Davis, Priti Patel, Owen Patterson and John Whittingdale join Rees-Mogg in demanding that the PM abandon her plans – or face heavy defeat in the Commons.
Meanwhile, the Government has become embroiled in a fresh row over the publication of the Attorney General Geoffrey Cox’s legal advice on the Withdrawal Agreement.
Labour’s shadow Brexit secretary Sir Keir Starmer is pressing ministers to comply with a binding Commons motion to publish the full advice after ministers dropped their opposition to the motion to avoid a damaging defeat.
However, Downing Street has only said the Government would be releasing a “full reasoned position statement” laying its out political and legal position on the Withdrawal Agreement.
The Prime Minister’s official spokesman said the move was in line with an undertaking given to MPs by Cabinet Office Minister David Lidington in the House.