According to data from the UK government, a no-deal Brexit could cost the Treasury £90bn – a significant dent in public finances. This figure was stated by the UK Chancellor Philip Hammond, who added that there was an option to vote out the Conservative government in a no-confidence motion to prevent such an outcome.
He suggested that he could work with other MPs to block a hard Brexit, which is becoming increasingly likely with each passing day. The Treasury would not be able to afford long-term tax breaks or hikes in spending in the event of such a scenario.
While addressing the House of Commons on Tuesday, Hammond remarked, ““We’ve built up around £26-27bn of fiscal headroom and the purpose of having that headroom is precisely in order to protect the UK economy from the immediate effects of a possible no-deal exit.”
This fiscal headroom would only be adequate to smooth over issues in the event of UK’s departure from the EU with a deal in place.