Philip Hammond has responded to criticism that HM Treasury did not provide any short-term analysis on the impact of Brexit on the UK economy.
Last month the Treasury select committee published a report on the withdrawal agreement that prime minister Theresa May had secured with the European Union, criticising the government for only providing analysis of its impact over the long-term.
In response the Chancellor of the Exchequer said: "The economic model used by the cross-government group to assess the economic effects of different EU exit scenarios is not well suited to analysis of short-term developments.
"However, the Bank of England published analysis on 28 November at the request of the committee which assessed how EU exit could affect the UK economy over a five-year horizon."
The Bank's analysis said a Brexit outcome which involved no transition period and no deal, would see GDP 10.5 per cent lower over a five-year period than would otherwise have been the case, while Mrs May's deal could provide a boost for economic growth under certain circumstances.
The committee also criticised the Treasury for not modelling the "backstop" - which was agreed to in the withdrawal agreement and which establishes a single UK-EU customs area if a post-Brexit trade agreement isn't reached by December 2020.
In response, Mr Hammond said: "The backstop is an insurance policy which neither side wish to use; and if triggered, would be explicitly temporary.
"The precise nature of future arrangements cannot be set out at this stage. As such there is not yet sufficient specificity on detailed arrangements for modelling purposes, and therefore the provisions of the backstop have not been included in the analysis."
MPs are scheduled to vote on Mrs May's deal next week after the vote was pulled last month to allow the prime minister to seek further assurances from the EU over the backstop.
Responding to Mr Hammond's comments, Nicky Morgan, the committee's chairman, said: "The Chancellor’s response to our report has shed no more light on these issues. When MPs do eventually come to vote on the withdrawal agreement next week, we will be doing so without all the facts.
"This is not a position which MPs, as representatives of constituents across the UK, should be put in by any government."
damian.fantato@ft.com
