Hammond slapped down over divorce bill for Brexit
Britain WON’T pay up if trade talks collapse, No 10 insists
PHILIP Hammond was slapped down last night after he suggested that Britain would pay a multi- billion pound Brexit divorce bill even if there is no deal on trade with the EU.
The Chancellor said it was ‘inconceivable’ that ministers would walk away from the UK’s financial ‘obligations’ to the EU.
Paying up was necessary to preserve Britain’s credibility on the world stage, he suggested.
But he was immediately contradicted by No10, which insisted the financial settlement, thought to be worth around £40billion, was conditional on a future trade deal.
Appearing before the Treasury select committee, Mr Hammond also revealed that the Cabinet is yet to hold a full discussion about what kind of trade deal it should seek for post-Brexit Britain. There had been no specific talks on what the ‘ end- state position’ should look like, he said.
Talks on trade within Cabinet would take place once the negotiations had moved on to that phase, and it would be ‘premature’ to have them now.
But it was Mr Hammond’s comments on the divorce bill that enraged Eurosceptic MPs, who accused him of undermining Britain’s negotiating position.
Asked if an exit payment was ‘contingent’ on getting a deal on a future trade relationship, he said: ‘Nothing is agreed until everything is agreed. But I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation.
‘That’s just not a credible scenario, that’s not the kind of country we are and frankly that would not make us a credible partner for future international agreements.’
Brexiteer Tory MP Peter Bone said the remarks were ‘unbelievable’ and must not represent the policy of the Government. He argued that if there is no progress at next week’s summit the Prime Minister should walk away and make plans for ‘no deal’.
He added: ‘They are wrong and would damage our negotiating position. I cannot envisage any situation where we come out of the EU without a deal and still pay money. That is just not possible.
‘The sooner we make that clear the better. If you get to the summit next week and there is no way forward that would be the time to say, “We are coming out on WTO [World Trade Organisation] terms and by the way, we’re not going to pay you a penny”. They would be champing at the bit within a few weeks.’
Downing Street immediately slapped down the Chancellor for contradicting Theresa May’s position.
The PM’s official spokesman said: ‘The position of the Prime Minister and the Government is that nothing is agreed until everything is agreed, and that includes the financial settlement. The discussions we have been having with the EU are in the context of building a future relationship.’
Mr Hammond said that the economic and tax benefits of getting a good deal would dwarf any exit payment.
Eurosceptic MPs have blanched at the possible scale of the bill – which could add up to £50billion depending on how it is calculated. But the idea of paying up without a trade deal is anathema to them. Cabinet ministers are divided on what the future trade arrangement should be.
Eurosceptic ministers such as Michael Gove and Boris Johnson are wary of tying Britain too closely to single market rules after we leave because it would limit the country’s ability to secure trade deals with third countries.
But Remainers such as Mr Hammond want closer links to the EU to protect existing arrangements.
SHE was greeted with the usual cheers from Government sycophants when she entered the Chamber at 11.57am but during Prime Minister’s Questions a few minutes later, Theresa May was regarded with suspicion by Conservative Brexiteers.
They have put up with an awful lot of nonsense from her and her Government so far during the Brussels negotiations. They swallowed that underwhelming Florence speech. They kept schtum when she gaily offered ever higher sums of ‘divorce payment’ to Jean-Claude Juncker. But with that fandango in Brussels on Monday their patience has frayed.
Their understated unease is a great deal more powerful, theatrically, than any amount of proEuropean squeaking from the Opposition or from Mother Soubry. It is more menacing, all the colder for being below the surface. You sense that they, like their Democratic Unionist allies, are deadly serious about their position and therefore see no need to exaggerate it. Hyperbole is the currency of bluffers and despots.
Jacob Rees- Mogg ( Con, NE Somerset) was called towards the end of the session. He stood at the far end of the House, doublebreasted suit, voice unhysterical, one hand used to help convey his point. He asked Mrs May if, before her next trip to Brussels, she would ‘apply a new coat of paint to her red lines because on Monday they were starting to look a little bit pink’.
Translation: we’ve had enough of this pusillanimous caving in to the EU, Prime Minister. As ever with Mr Rees-Mogg, it was put with faultless politeness. He could have been offering her a slice of lemon drizzle cake.
But it still must have stung her a little. A Labour heckler told Mr Rees-Mogg to ‘grow up!’ but it was a clever and accessible and proper question – and will certainly have meant more to viewers than all the bejargoned stuff churned out by officialdom.
Mrs May gave a faintly insincere laugh and replied: ‘I can happily say that the principles on which this Government is negotiating were set out in the Lancaster House speech, they were set out in the Florence speech, and those principles remain.’ Make of that what you will, for the Lancaster House and Florence speeches had very different flavours.
Another Eurosceptic, Bernard Jenkin (Con, Harwich & N Essex), again impeccably gentlemanly, reminded the PM that countries such as Canada, Japan, the US and Australia are eager to talk to us about trade deals. There is apparently even talk of us joining the Trans-Pacific Partnership.
YET all those opportunities would ‘not come our way if we remain shackled to EU regulations once we have left the EU’ (which is pretty much what Downing Street’s geniuses seem to have been proposing on Monday).
Mrs May again said she was ‘very happy’ to assure Mr Jenkin she knew about those trade deal offers. What she wanted to do, she added, was ‘get a good trade deal with the EU’ in addition to all that other foreign stuff. Again, we must make of this what we will.
When she claimed that she could achieve both a soft border in Ireland and full independence from the EU, Labour MPs yelled: ‘How? How? How?’ When she rounded on them and gave them a longishwinded answer, the hecklers added: ‘You don’t know!’
Peter Bone (Con, Wellingborough) was worried about European judges still having some sway over our courts. He wondered if Mrs May would like him to join her when she next goes to Brussels. Much laughter at this. I don’t know why. Old Bone might give Juncker & Co a more accurate view of British opinion than Mrs May’s civil servants are doing.
At points of order, the Scots Nats and others were still banging on about Brexit Secretary David Davis not handing over all the Whitehall papers which Europhile MPs thought they had forced him to surrender. Speaker Bercow did some posturing.
That little sideshow will rumble on a few days yet but it is more about MPs’ vanity than Brexit.