Chancellor leads plot by Tory MPs to stop ‘shocking’ no-deal exit

Philip Hammond: No deal would mean spending reserves. Picture: Getty

The group is understood to have met three times and considered the possibility of forcing a second Brexit referendum as a means of stopping the UK crashing out of the EU without a deal.

The Sky News report came as Mr Hammond said it would be “shocking” if the next prime minister tried to sideline Parliament to push through a no-deal Brexit.

Speaking to the BBC’s Political Thinking podcast, the Chancellor said he was confident that MPs would find a way to block any attempt at a no-deal exit from the EU.

Boris Johnson, the front-runner for the Tory leadership has said he will take Britain out of the EU on 31 October with or without a deal.

The former foreign secretary said he could not “envisage the circumstances” in which Parliament would be prorogued, or suspended, to facilitate a no-deal scenario.

Leadership rival and current Foreign Secretary Jeremy Hunt has ruled out any such move, but has also said he is willing to proceed with a no-deal exit.

Mr Hammond said: “It would be, frankly, rather shocking if the House of Commons – the elected representatives of the people – could be simply sidelined by a Government that was doing something that was the exact opposite of what the House of Commons clearly wanted done.”

The Chancellor said it was “clear” that the Commons did not support a no-deal option.

He added: “Our economy will suffer a short-term shock and then in the long term will be permanently smaller than it will otherwise have been.”

Mr Hammond said a no-deal would mean spending the £26 billion “fiscal headroom” reserves he has built up on dealing with the economic impact of leaving the EU without an agreement.

The Chancellor said: “No-deal means we will have to spend the money, but not in a discretionary way.

“We will be forced to spend it on protecting businesses and industry and households on what is likely to be a surge in inflation.”