‘We will have a politically chaotic situation’: Philip Hammond on threat of PM’s Brexit deal not being approved

The Chancellor of the Exchequer Philip Hammond has reiterated his belief that the Prime Minister’s Brexit plan is the only viable option for the country.

He told ITV’s Peston: “It's clear that if the deal is not approved by Parliament we will have a politically chaotic situation.

”And, we don't know what the outcome of that will be.“

The Chancellor also committed to publishing economic reports on Brexit using staying in the European Union as the baseline for comparison.

When questioned by ITV News Political Editor Robert Peston on whether it would be embarrassing to do so if it shows that staying in the EU is the most prosperous, Mr Hammond said: “This isn’t only about economics – I am the Chancellor so I look at the economic aspects of Brexit as being very high importance but I accept there are political and constitutional questions that people want to pursue in this debate.”

Mr Hammond did admit there would be costs of any extension to the transition period.

“It would have to be proportional, it certainly wouldn’t be more than that, but it would depend on what we were getting in return.

“It would have to be proportional, we would have to negotiate it at the time… When we look at the economy and the operation of the economy, getting a smooth exit from the European Union, doing this in an orderly fashion, is worth tens of billions of pounds to our economy.”

It has been another tumultuous week for the Conservative Party not least because of the ever-strained relationship with the Democratic Unionist Party.

The DUP abstained on several amendments to the government's Finance Bill on Monday, with eight DUP MP's also supporting an amendment proposed by the Labour Party.

Mrs May requires the support of the DUP to push through key policies.

However, in recent weeks tensions have grown over the Prime Minister's Brexit proposals.

DUP deputy leader Nigel Dodds told ITV's Peston that the confidence and supply agreement is dependent on a unified front on Brexit.

"There are two sides to this bargain, if they don't deliver - clearly we want to send them a message.

"But, we want to remain committed to the confidence and supply because we believe that is the best way forward for the United Kingdom both in delivering the priorities that we have and the priorities of the Government."

Labour’s policy on a second referendum, again, came under scrutiny on Peston with Rebecca Long-Bailey and David Lammy disagreeing on how likely a vote was.

• Peston is broadcast on ITV at 10.45pm on Wednesdays - but you can watch it live on this page at 8pm as the programme is recorded.