Hammond still saying we need a soft Brexit
CHANCELLOR Philip Hammond reopened Cabinet tensions over Brexit yesterday as he set out plans for a ‘transition’ out of the EU that could take years.
Mr Hammond, who is pushing Theresa May to compromise her position on Brexit, said negotiations with Brussels should prioritise jobs and the economy over immigration.
And he suggested the UK could mimic the EU’s tariffs and rules on customs for years after leaving to reduce the need for border checks on goods. Insisting the Government was ‘ready for the challenge’ of exit talks, Mr Hammond said he was confident a Brexit deal could be reached that puts ‘jobs and prosperity first’.
This would reassure employers that talent and trade will continue to flow smoothly once Britain leaves.
Mr Hammond stepped back from calling for the UK to stay within the single market or customs union.
But he suggested a ‘pragmatic’ compromise on customs arrangements which is also likely to alarm
‘Jobs and prosperity’
pro-Brexit ministers if it becomes Government policy.
In a speech to City grandees at Mansion House said: ‘We’ll almost certainly need an implementation period, outside the customs union itself, but with current customs border arrangements remaining in place, until new long-term arrangements are up and running.’
The think- tank Open Europe described the plan for so-called ‘parallel tariffs’ as being ‘too clever by half’. ‘Such a system will be hard to negotiate, overly bureaucratic and politically very difficult,’ it said.
The plan could make it harder for Britain to negotiate new trade deals around the world in the immediate aftermath of Brexit as the UK would have to continue to level EU tariffs on goods from third countries.
It could also mean the UK having to hand over income from tariffs to Brussels for years to come.
But Mr Hammond insisted the move would be needed to limit any disruption to the free flow of goods between the UK and Europe.
He said it would otherwise be ‘challenging’ to guarantee ‘frictionless’ borders when the UK leaves the EU.
Eurosceptic MPs are willing to con- sider a short transition period as the price for a smooth exit from the EU.
But pro-Brexit Transport Secretary Chris Grayling sounded a note of caution yesterday. He said: ‘I don’t think anyone is talking about delays of years and years.’
Mr Hammond has been criticised by Eurosceptic ministers for talking down Brexit. And while it could be made to work, he warned talks ‘will get tougher’ and that the economy could suffer if they went wrong.
Mr Hammond also told Brussels that the entire European economy will suffer if it tries to punish the UK’s financial sector.
The Chancellor also struck a much softer tone on immigration, saying: ‘While we seek to manage migration, we do not seek to shut it down.’
He is among a group of senior Cabinet ministers urging Mrs May to drop the controversial target to cut net immigration to the ‘tens of thousands’ and to take foreign students out of the immigration figures.
The Institute of Directors welcomed Mr Hammond’s call for a lengthy transitional deal.