Madness to cut EU trade, says Hammond
PHILIP HAMMOND has said it would be “madness” not to seek “the closest possible arrangement” with the EU in comments that appear to widen the gulf between the Chancellor and Theresa May over Brexit.
Mr Hammond, who flew to Hamburg with the Prime Minister for the G20 summit, suggested that leaving the EU was a “political argument” and stressed that the EU “will remain our largest trading partner”.
His comments jarred with Downing Street’s outward-looking trade agenda and come as Mrs May uses the G20 to talk trade with leaders of the world’s three biggest economies: President Trump, President Xi Jinping of China and President Shinzo Abe of Japan. Today she will hold a one-to-one meeting with Mr Trump.
Mr Hammond, a former Remain campaigner who favours a softer Brexit than Mrs May, appeared to prioritise the importance of keeping strong trading links with the EU yesterday without mentioning other major nations.
He said those who voted, like him, to remain in the EU “want to see a Brexit that looks sensible to them”. He added that they want “a Brexit that is focused on protecting jobs, business, prosperity, trade, a Brexit that recovers sovereignty for the UK but also recognises the reality that… the EU will remain our largest trading partner and
our nearest neighbours, and that it would be madness not to seek to have the closest possible arrangement with them going forward.
“To trade with them, to co-operate with them, but doing it as a sovereign country.”
He went on: “The problem is this... there’s an economic argument and a political argument. On the economic argument, it’s very clear that a very large proportion of our exports are going into the EU.
“But there’s also a political dimension. The EU is on a path towards deep political integration. That is not something that the British people are ever going to feel comfortable with.
“Perhaps it’s better that we just accept that the right way for us to work is very close economic collaboration, security collaboration, collaboration in science and technology, higher education, in all the areas where we can sensibly collaborate together but outside of the political union.”
Mrs May, meanwhile, spent the day stressing the progress she was making in forging post-brexit trade deals with some of the world’s biggest economies. Government sources said China’s President Xi had been “incredibly positive” about Brexit and was “looking forward to doing business with an open Britain”.
Today Mrs May will meet President Trump, President Abe, President Narendra Modi of India and President Recep Tayyip Erdoğan, of Turkey, to lay the groundwork for further trade deals.
Mrs May said she wanted to ensure that Britain can “trade around the rest of the world” while also maintaining a “good trading relationship” with the European Union.
Yesterday, The Daily Telegraph reported calls from the Confederation of British Industry for Britain to remain in the customs union and single market indefinitely as part of transition arrangements.
Mr Hammond responded by saying: “I’m glad that the business community is exercising a voice in this discussion. I think that’s helpful.”
He said it would take time to build new markets overseas and added: “If we lose access to our European markets, that will be an instant effect, overnight.”