Hammond calls on Tory MPs to ‘stick with PM’
CHANCELLOR Philip Hammond has called on Tory MPs to back the Prime Minister amid growing disquiet over her leadership.
It comes amid reports of Cabinet rifts over Europe and rumours that a leadership contest could soon be triggered by disgruntled backbench MPs unhappy with Theresa May’s Brexit record.
Mr Hammond urged MPs to “stick with the Prime Minister”, adding: “She’s navigating a very tricky, difficult negotiation process.”
His intervention followed a speech by Brexit Secretary David Davis which aimed to quell unease in Tory ranks – stressing the united front among the Cabinet’s big-hitters.
He said: “There is no difference between the Chancellor and myself and indeed the Prime Minister in terms that we both want a Brexit that serves the British economy and serves the British people.
“There will be arguments about the tactics but they will change, the options available to us will change throughout the course of the negotiations.”
Leading Brexiteer Bernard Jenkin said Mrs May was “a little bit hobbled” by a Cabinet that did not represent the views of the party.
BREXIT Secretary David Davis has played down Cabinet rifts over Europe, insisting there is “no difference” between himself, Chancellor Philip Hammond and Theresa May on the outcome they are seeking from Britain’s EU withdrawal.
Mr Hammond earned a rebuke from Downing Street on Thursday by saying that Britain’s trade relations with the EU would change only “very modestly” after Brexit.
And the Chancellor risked stoking Tory divisions further yesterday by saying the UK should seek a “middle way” in negotiations in order to maximise access to EU markets.
His comments came as prominent Brexiteer Jacob Rees-Mogg, chairman of the influential European Research Group, warned that the Government’s “timid and cowering” approach risked squandering the potential gains of leaving the EU.
Mr Davis used a speech in Teesport to try to quell unease in Tory ranks, asserting that the UK will be able to negotiate and sign trade deals with outside countries during the two-year transition period expected to follow the official date of Brexit in March 2019.
The Brexit Secretary made clear he will argue for Britain to continue to enjoy the benefits of more than 750 international agreements, including trade deals with non-EU countries, during the transition period.
And in a bid to allay Eurosceptic concerns over Britain being required to follow EU rules while having no say in drawing them up, he said he will seek the establishment of an “appropriate process” for the UK to object to any new laws introduced during transition.
“Of course we will leave the institutions of the Union next March, but we will still make our voice heard,” said Mr Davis.
“This will be a relationship where respect flows both ways, as we move from being a member of the European Union to its closest partner.”
Mr Davis portrayed the two-year transition – known by UK ministers as an “implementation period” – as “the bridge that we plan to build to smooth the path to our new relationship with the European Union after Brexit”.
He acknowledged that during transition Britain will follow EU rules and “replicate the effects of the EU customs union”, including new rights and obligations.
But he added: “Participating in a customs union should not and will not preclude us from formally negotiating and indeed signing independent trade agreements – although of course they will not enter into force until the implementation period has ended.”
Mr Davis said: “There is no difference between the Chancellor and myself and indeed the Prime Minister in terms that we both want a Brexit that serves the British economy and serves the British people.
“There will be arguments about the tactics but they will change, the options available to us will change throughout the course of the negotiations.”
Mr Hammond said the approach to Brexit would not be swayed by Tory rebels on either side of the EU divide.
“There are people that wanted to stay in the EU customs union, we reject that argument,” he told Sky News at the World Economic Forum in Davos, Switzerland.
“There are people that want us to sever our trade links with Europe and give up this market, we reject their arguments too.
“We have got to stick to the middle way, which is negotiating the maximum access we can get to European markets compatible with the red lines we have already set out about repatriating control over our laws, our borders and our money.”
Defending his “very modest” comments, Mr Hammond said: “The small-
er the changes that happen to our access to market and to frictions at the borders, the better.”
Health Secretary Jeremy Hunt said it was “absolutely wrong” to accuse Mrs May of a “timid” approach to Brexit.
“This is the Prime Minister that gave us absolute clarity after the Brexit vote that we were going to get back control of our laws, our borders, our money – the most profound strategic decision any prime minister has to make in the current circumstances,” he told BBC Radio 4’s Today programme.
Mr Hunt said the UK should expect “very limited” changes – or possibly none at all – to EU market access in a Brexit deal.
“We actually start with 100% alignment and that means – and this is the crucial point that he was making – is that we should be able to expect very limited and possibly no changes to market access as a result of the free trade deal we negotiate. That is something we can be very positive about.”
Shadow Brexit secretary Sir Keir Starmer said: “Five months after Labour set out the terms for strong transitional arrangements, David Davis appears to have finally woken up to reality.
“However, this speech will do nothing to hide the deep divisions at the heart of this Tory Government.
“Theresa May has wasted months of the negotiations, failing to call out the extreme Brexiteers in her party who want the UK to crash out of Europe without a deal at any costs.
“It’s time she put country before party and agreed on a transitional deal on the terms Labour set out last summer – that means within the single market and a customs union with the EU during this period.
“The truth is that Tory infighting is now the single biggest threat to a Brexit deal that works for Britain.”
THE vote to leave the EU has cost Britain “tens of billions of pounds” in lost economic activity, the governor of the Bank of England has said.
Mark Carney said investment in the UK had still to recover in the way that it had done in the rest of the global economy due to the “Brexit effect”.
However, he said the impact was likely to be “short term” and there was the prospect of a “conscious recoupling” with the international economy in the year ahead.
“The economy is about a percentage point less in size than we expected before the vote at this point in time – by the end of the year, probably two percentage points,” he told BBC Radio 4’s Today programme.
“What it works it out to is tens of billions of pounds of lower economic activity. The question is how do we make that up over time by growing above potential.”
He said, however, that there was now the potential for growth to pick up as the shape of any Brexit deal became clearer and firms regained confidence to invest.
“What is happening in the UK is effectively the Brexit effect in the short term. And I would underscore ‘in the short term’,” he said.
“The world economy is accelerating and we haven’t seen that yet. But there is the prospect this year, as there is greater clarity with the relationship with Europe and subsequently with the rest of the world, for a conscious recoupling of the UK economy with the global economy.”
Mr Carney said the deeper the relationship with the EU after Brexit, the better it would be for the UK economy.
“The deeper the relationship with Europe, the deeper the relationship with the rest of the world – and the two are obviously connected, it is a complicated set of negotiations – the better it is going to be over time for the UK economy,” he said.
However, whatever the eventual outcome of the negotiations, he said the Bank had taken steps to ensure that the UK’s financial sector was well-placed to cope.