Election ‘will be a second poll on EU’
MPS warn Remain camp will use vote to water down Brexit if Hammond gets his way on lengthy transition
THE next general election will be a “second referendum” on Brexit if Philip Hammond gets his way and implements a lengthy transition period lasting up to three years, MPS warned yesterday.
The Chancellor, who is running the country while Theresa May is on holiday, said that after Britain leaves the EU in March 2019 there will be a “business as usual” period before new rules on migration and trade are gradually introduced. He has won the backing of Brexiteers including Michael Gove and Liam Fox for an implementation period “of at the most three years”. But Boris Johnson, the Foreign Secretary who is currently on a working trip in Australia, has not spoken publicly in support of the Chancellor’s stance and is likely to be the biggest Cabinet opponent of a lengthy transition.
Last night the Foreign Office and the Treasury issued a joint statement saying Mr Hammond and Mr Johnson were “working together to take the UK out of the EU”, but it made no mention of transitional arrangements.
Critics fear that if Britain is still in a state of flux when the next general election comes around – in 2022 at the very latest – Remain supporters will seize the chance to water down Brexit and even try to reverse the process. Joseph Muscat, the Maltese prime minister who held the presidency of the European Council until July, said yesterday that “for the first time, I’m starting to believe that Brexit will not happen”.
Mr Hammond told the BBC he envisaged Britain leaving the EU “with many arrangements remaining very similar to how they were the day before we exited”. He said new arrangements on migration, trade and customs would be brought in over time, and added: “There is a broad consensus that this process has to be completed by the scheduled time of the next general election which is in June 2022 … so a period of at the most three years.”
His comments prompted alarm among Leave campaigners and some MPS, including Nigel Evans, the secretary of the 1922 Committee of backbench Tories. Mr Evans said: “This must not be seen as a ruse to keep the door open to going back into the EU. It should come to an end well before the general election in 2022.”
On the question of the next election becoming effectively a second Brexit referendum, he added that “people are wary that there might be some Remainers who might try that on, but that would flout the democratic decision of the British people”.
While June 2022 is the latest possible date for the next election, it is entirely possible that it could be held before then, particularly if Mrs May is replaced as leader. That would mean an election happening while many aspects of Brexit were still up in the air.
If opportunity makes a thief, Philip Hammond has certainly taken the chance of Theresa May’s three-week summer break to steal the Brexit agenda while he is in charge of the country. The Chancellor has presented such a clear vision for a soft, “jobs first” Brexit – for which he now has support from virtually every Cabinet minister but Boris Johnson – it seems he will be able to present Mrs May with a fait accompli when she returns from the Alps.
Mr Hammond wants a “standstill” transition when Britain leaves the EU in March 2019 so that businesses retain full access to the single market and the customs union. He then wants a transitional period to last for up to three years, far longer than supporters of a “hard” Brexit would like.
And on the evidence of recent days, Mr Hammond will get his way.
Since the Prime Minister arrived in Lake Garda on Monday for the first part of her European tour, former Leave campaigners including Michael Gove and Liam Fox have fallen into line behind Mr Hammond’s vision of a “status quo” transition followed by a lengthy implementation period.
Liam Fox, the International Trade Secretary, who said less than a fortnight ago that the implementation period should last just a few months, has now decided that a two-year transition phase would amount to no more than a “rounding error”.
Mr Gove, the Environment Secretary, who earlier this month reportedly wanted to bring Brexit talks “crashing to a halt” to ensure a hard Brexit, has now said that an implementation period will ensure that “we continue to have not just access to labour but the economic stability and certainty that business requests”. He added: “That is something around which the Government and the Cabinet is united.”
David Davis, the Brexit Secretary, has said that a “broad and simple” deal is needed that avoids a “cliff edge” for business, which seems to put him in Mr Hammond’s camp.
Amber Rudd, the Home Secretary, said this week that EU citizens will be free to come to Britain to work and live after March 2019 as long as they register with the Home Office, meaning freedom of movement will effectively continue.
Tellingly, Downing Street, which insists Mrs May remains very much in charge even while she is on holiday, has not pushed back against any of these views. Where once it dripped poisonous briefings against the Chancellor, Number 10 now insists that Mr Hammond has the Prime Minister’s support. One senior source yesterday said he “speaks for the Government on many of these issues”.
Mrs May, of course, has been emasculated by the general election result. Her intention was to get rid of Mr Hammond in a post-election reshuffle, but instead Mr Hammond’s power appears to grow by the day.
Shorn of her inner circle of Nick Timothy and Fiona Hill, the joint chiefs of staff on whom she relied so totally before the election, Mrs May can no longer impose her will on her ministers, who take every opportunity to put forward their own views.
Perhaps more significant than the fact that Mrs May is in Italy (where she is keeping fully abreast of developments) is Boris Johnson’s absence from the country.
The Foreign Secretary, who has the most difficult relationship of any Cabinet minister with Mr Hammond, is in Australia on government business, sufficiently far away as to make it difficult for him to impose his own views on the debate.
The Chancellor and the Foreign Secretary have not seen eye to eye for years, but their relationship soured during the EU referendum campaign to the extent that they openly mocked each other – something which Mr Hammond continues to do.
Until yesterday, Mr Johnson had not made any comment on what his Cabinet colleagues have said in his absence, and when The Telegraph contacted his spokesman yesterday, he initially made it clear that he would not be doing so.
Hours later, however, the Treasury and the Foreign Office issued a joint statement to The Telegraph saying: “The Chancellor and Foreign Secretary are working together to take the UK out of the EU including out of the customs union, single market and European Court of Justice.
“They, along with the whole of government, are getting on with this very important work.”
The brief statement hardly amounted to a ringing endorsement from Mr Johnson of the Chancellor’s plans. Both men, of course, are seen as potential successors when Mrs May’s premiership comes to an end, and while Mr Hammond seems to be winning the argument in the Cabinet, Mr Johnson is more popular with the
party membership and will surely want to maintain a harder stance over Brexit in any future leadership bid.
Another potential leadership contender, Ruth Davidson, the Scottish Conservatives leader, yesterday described the recent Cabinet rows over Brexit and the leadership as a “really unedifying spectacle”. She said: “The rule should be to get behind the Prime Minister at this time of great national interest. A bit of sharp elbowing around the top table does not help anybody.” For now, however, Britain seems likely to accept the sort of lengthy transitional deal favoured by the EU. The arrangement put forward by Mr Hammond involves a “swift, broad and simple” deal, according to one British official, in which companies retain access to the single market and customs union and allow free movement to continue for a period, followed by a transition phase in which Britain gradually disentangles itself from EU rules and obligations.
The UK-EU trade deal could be finalised during the transition phase, which Mr Hammond has said must be completed before the next election in 2022.