Theresa May is poised to join Philip Hammond and warn Boris Johnson about the risks of a No Deal Brexit.
In her first intervention in the Tory leadership battle, she will give a speech in Scotland tomorrow insisting that ‘our precious Union’ must be protected as Britain leaves the European Union.
This will be seen as a direct warning to front runner Mr Johnson that his pledge to leave on October 31, deal or no deal, could lead to a split with Scotland after 312 years.
In March, Mrs May was told in a confidential report by Cabinet Secretary Sir Mark Sedwill that ‘the stability of the Union would be dislocated’ by crashing out of the EU with no agreement.
Chancellor Mr Hammond yesterday took the reins of a campaign by Tory MPs to stop No Deal, warning that it would punch a £90 billion hole in the UK’s public finances.
He refused to rule out bringing down the Government in a confidence vote to stop it happening this autumn, telling MPs: ‘I believe that a No Deal exit would be bad for the UK, bad for the British economy and bad for the British people. It would be wrong for a British Government to seek to pursue No Deal as a policy.’
Mr Johnson hit back yesterday, telling a leadership hustings in Belfast that warning of dire consequences had been ‘wildly overdone’.
‘We should not be terrified of a No Deal Brexit,’ he said. ‘We will make sure we look after the agricultural interest… whatever is necessary to protect farmers. We will make sure that just-in-time supply chains are protected.’
Jeremy Hunt, who also says he will leave without a deal if necessary, yesterday acknowledged that the effects could be ‘very serious’. Asked if the impact of No Deal would be as bad as the financial crash, the Foreign Secretary said: ‘The Bank of England’s predictions are that it wouldn’t be quite as bad, but it could be very serious if we get this wrong.’
Mr Hunt has now won the endorsement of ex-Tory leader William Hague, who said of a ‘do or die’ Brexit pledge by Mr Johnson: ‘Die could easily become the outcome.’
But Iain Duncan Smith, another ex-Tory leader and a key figure in Mr Johnson’s campaign, savaged Mr Hunt for refusing to commit to leaving by October 31.
He said Mr Johnson would simply present the EU with a take-it-or-leave-it offer of a trade deal with Britain, adding: ‘We’re not going to go back and renegotiate.’
Mr Duncan Smith also launched a personal attack on Mr Hunt, calling him a ‘pushover’ who had adopted a ‘do or dither’ approach to Brexit. Mr Hunt’s team claimed this showed Mr Johnson was getting ‘rattled’ because his rival was building momentum.
Both leadership contenders say they will never accept a Brexit deal including the controversial Irish backstop that the EU insists is essential.
It emerged that the broadcast will not go out until July 16, when most Tory activists will have cast their votes.