Sajid Javid said opposition parties have “made up” warnings the government would be forced to slash public spending in the event of a no-deal Brexit.
The Chancellor was responding to a question in Parliament from Liberal Democrat Sir Ed Davey, who said the Office for Budget Responsibility (OBR) had published “alarming” analysis of the fallout from a no-deal Brexit.
Sir Ed said: “Even in its least damaging no-deal Brexit, the OBR predicts a hit to Britain's finances that would destroy every single spending announcement by the Prime Minister and the Chancellor.”
“Given that, isn't it unacceptable for a Chancellor and a government to be publicly contemplating a no-deal Brexit, to fail to tell the truth to the British public that spending on health, schools and police will be slashed in the event of a no-deal Brexit?”
Mr Javid, who presented his spending plans at the Conservative Party conference on Monday, replied: “I don't recognise that picture at all, it's one just made up by the Liberal Democrats.”
“What’s unacceptable is for the Liberal Democrats to pretend that the referendum on the European Union never happened.”
The Chancellor faced a similar query from SNP MP David Linden, who said a no-deal Brexit would cost up to 100,000 Scottish jobs.
Mr Javid said this figure was “just scaremongering from the SNP”.
He said there were “intensive negotiations” underway with both the Irish government and the EU, and all parties were working towards a deal ahead of the Brexit deadline.