Phillip Hammond has said Theresa May’s Brexit deal will help heal the divisions in the country fuelled by the referendum.
The chancellor told the Commons Treasury Committee on Wednesday the “economic cost” of leaving the EU was worth it in order to “move on as a nation”.
But he said he would take a “different view” if the proposal was to leave the bloc with no deal at all, as that would deliver a much bigger economic hit.
The attempt by May and her allies to convince Tory MPs to back her deal appear to have failed, with around 100 backbenchers having refused to publicly support the plan.
It is widely expected the PM will be defeated on December 11, when the Commons votes on the withdrawal agreement signed with the EU.
Speaking to MPs on Wednesday, Hammond said: “Divided countries are not successful countries.
“My own judgment is that we need a way forward which heals our country. We are a deeply fractured country, with opinion heavily polarised and trust in the political system correspondingly damaged.
“I have thought long and hard about this, and I have come to the conclusion that the future success of our country depends on us executing the instructions of the British people in the referendum, leaving the EU, but doing so in a way that minimises the impact on our economy and maximises the opportunity that we have in the future, so that we can come together as a nation and work together to exploit those opportunities in the future.
“Any solution which left the country divided, left a large segment of the population feeling betrayed, in my view, would have a negative political and societal impact that would far outweigh the very small economic impact that the White Paper scenario is showing.”
But in a suggestion he would oppose leaving with no deal, Hammond added: “If the only proposal on the table was a no deal exit which would cost nearly 10% of our GDP, according to this model, I wold take a different view.”
May yesterday suffered a string of damaging Commons defeats, including being forced to give MPs a say on what happens if her Brexit deal is voted down on Tuesday.
Ministers also had to agree to publish the “final and full” legal advice to Cabinet on the withdrawal agreement, as the government was found to be in contempt of parliament for not already doing so.
The prime minister was today accused of “concealing” the downsides of her deal after the advice revealed that the UK could be “indefinitely” tied to the EU.