“The OBR already assumes an orderly Brexit, so there won’t be a ‘deal dividend’ beyond the forecast just by avoiding no-deal. Business confidence may improve with increased certainty, but it’s not credible to describe this as a dividend,” said Morgan.
Nicky Morgan MP, the Conservative chair of the committee, said Hammond’s “dividend” claim, at the Conservative party conference last year, had already been undermined by the government’s independent forecaster, the Office for Budget Responsibility. The OBR had told the committee the dividend was not an economic boost so much as “avoiding something really very bad” in the form of a no-deal departure.
The criticism came after data on Monday showed the economy grew by just 0.2% in the final three months of 2018, down from 0.6% in the third quarter. The fourth-quarter figures contained signs of an even sharper slowdown, with the economy posting a decline of 0.4% in December amid signs that Brexit uncertainty is taking hold.
In a highly critical report, the Treasury select committee warned that the chancellor’s claims of a “deal dividend” if Britain avoided a no-deal exit lacked credibility.
Philip Hammond’s claim that Britain can reap an economic dividend from Theresa May’s Brexit deal has been flatly rejected by MPs, as official figures confirmed the UK has suffered its worst year for GDP growth since 2012.