Don’t rush to cut EU ties, warns Hammond
PHILIP Hammond opened up a fresh Cabinet rift over Brexit last night as he backed the idea of a deal with Brussels that could see a break with the EU delayed for years.
In a surprise move, the Chancellor went public with his support for ‘transitional arrangements’.
He said they would help reduce ‘risks to financial stability’ posed by Brexit. The idea of such a deal is viewed with suspicion by many Eurosceptics, who fear it could be used to lock Britain into key aspects of the EU, such as freedom of movement, for years. Brexit Secretary David Davis last week said he was ‘ not really interested’ in a transitional deal, according to a leaked memo.
But Bank of England governor Mark Carney has been pushing hard for the idea and Mr Hammond yes- terday told MPs that ‘ thoughtful politicians’ were now coming round to it. He said ministers would be looking to strike a transitional deal ‘early on’ in the Brexit talks.
His comments came as Labour prepared to warn that it could still try to frustrate Brexit at Westminster and a House of Lords report said that Britain could not take control of its borders and laws without leaving the single market.
Mr Hammond was speaking immediately after a meeting of the Cabinet sub-committee on Brexit yesterday. Last night No.10 sources played down speculation of a split and insisted ‘ no decisions’ had been taken on the issue. The Chancellor said that ‘having a longer period to manage the adjustment [between being in and out of the EU] would be generally helpful, would tend towards a smoother transition and would run less risks of disruption including, crucially, risks to financial stability’.
Treasury sources last night insisted that Mr Hammond, a prominent Remain campaigner, fully accepted that the UK would leave the EU by 2019, but wanted to look at ways of smoothing the ‘cliff edge’ effect on exporters and the City.
But former Ukip leader Nigel Farage said the Government was preparing for ‘half-Brexit’. And Tory MEP David Campbell said Norway ‘ has effectively had transitional arrangements’ for 20 years.
Major banks have been lobbying hard for a transitional deal, and Mr Hammond suggested some could shift their operations from Britain if they did not get one.
He said the success of Brexit would be judged by the Government’s success in curbing low-skilled migration from the EU and there were ‘no circumstances’ in which ministers would seek to ‘choke off’ the flow of highskilled arrivals.
Shadow Brexit secretary Sir Keir Starmer will today insist Labour has not given Theresa May a ‘ blank cheque’ to trigger Article 50 and will table amendments to any legislation on Brexit if ministers fail to publish a ‘meaningful plan’.
DOWNING Street last night brushed off a snub from EU leaders after they announced Theresa May will be shut out of an end- of-year dinner. She will travel to Brussels for Thursday’s European Council meeting, but will be excluded from the meal as the others discuss their Brexit negotiation game-plan.
Mrs May’s spokesman yesterday said the decision was ‘reasonable’.
‘A blank cheque’