Hammond: It would be madness not to have close links

PHILIP HAMMOND has warned Tories who want a hard Brexit that it would be “madness” not to have the closest possible relationship with the European Union.

Losing access to European markets will have an “instant” impact on the UK while building up trade links outside the bloc will take time, the Chancellor warned.

Speaking on the margins of the G20 summit, Mr Hammond also called for an end to the “navel gazing” that has dominated Westminster since the Conservative drubbing at the polls.

Securing a successful exit deal for Britain will help restore the party’s reputation with the public, he insisted. Mr Hammond said he wanted a Brexit that recovers sovereignty for the UK but recognises that the EU will remain the country’s largest trading partner.

“It would be madness not to seek to have the closest possible arrangement with them going forward,” he told reporters. Mr Hammond said he was “glad the business community was exercising a voice” following warnings over Brexit by the CBI.

“I’ve been clear that I do not believe it is either legally or politically possible to stay in the customs union and in the single market,” he said.

“My preference is that we negotiate a transitional structure which takes us outside of those memberships but in the transition phase replicates as much as possible of the existing arrangements so that the shock to business is minimised for the transition period.”

Mr Hammond said free trade agreements “always have implementation periods” and there will not be a “sudden” change in trade with countries outside the EU.

“You don’t just start selling on day one. You have to build a market, you have to build a brand, you have to build a reputation, you have to build commercial links that allow you to get into supply chains.

“This is a process and it will take time. The thing that I remind my colleagues is that if we lose access to our European markets, that will be an instant effect, overnight. To people who are looking to us to protect jobs, economic growth, living standards, they won’t thank us if we deliver them an instant hit with only a longerterm, slowly building benefit to compensate for it.”