The UK will be poorer economically under any form of Brexit, compared with staying in the EU, Treasury analysis suggests.
Official figures say the UK economy could be up to 3.9% smaller after 15 years under the PM’s Brexit plan, compared with staying in the EU.
But a no-deal Brexit could deliver a 9.3% hit, the new estimates say.
Chancellor Philip Hammond said the deal was not just about the economy, but would deliver “political benefits” too.
The Treasury estimates do not put a cash figure on the potential impact on the economy, but independent experts have said that 3.9% of GDP would equate to around £100bn a year by the 2030s.
The 83-page document does not attempt precisely to forecast the impact of Mrs May’s deal.
But it compares the likely impact of the proposals agreed by the Cabinet at Chequers in July and set out in the government’s White Paper with the alternative scenarios of Norway-style membership of the European Economic Area, a Canada-style free trade agreement with the EU and a no-deal Brexit.
It finds that GDP will be lower in 15 years under all Brexit scenarios than it would be with EU membership. And in all cases, national income will be reduced if migration from Europe is reduced from its current levels.
It was released as the prime minister prepared to head to Scotland on the latest stage of a tour of all parts of the UK to promote her deal to voters ahead of a Commons vote on her deal on 11 December.
Mr Hammond said if the deal was not voted through Parliament, Mrs May’s cabinet would sit down and “decide how best to proceed”, looking at how MPs had voted before deciding their next move.
Under any scenario, in a “purely economic sense” the UK would be worse off than if it stayed in the EU, as exiting would created “impediments to our trade”, said the chancellor.
But he argued that staying in the EU was not politically “viable” and, he added, Mrs May’s planned Brexit deal combined most of the economic benefits of remaining in the EU with the political benefits of leaving the EU.
Asked if the UK would be poorer under Mrs May’s deal, Mr Hammond said: “The economy will be slightly smaller in the prime minister’s preferred version of the future partnership.”
He said Mrs May’s deal would reduce to “an absolute minimum the economic impact of leaving the EU, while delivering the political benefits” such as being able to do trade deals outside the EU and “having control of our fishing waters”.