Rees-mogg joins the fray against Hammond

The Treasury is accused of ‘co-operating’ with business and being ‘the beating heart of Remain’

PHILIP HAMMOND has been accused by a senior Conservative MP of encouraging business leaders to raise concerns about Brexit as ministers prepare for a Cabinet showdown over Britain’s future outside the EU.

Jacob Rees-mogg, the leader of the 60-strong European Research Group of Eurosceptic Tory MPS, repeated claims made by Boris Johnson that the Treasury is the “beating heart of Remain” as he suggested a plot to ensure a “soft” Brexit.

It came as Tony Blair, the former Labour prime minister, was accused of using scare tactics to try to stop Brexit by comparing the current political climate to the rise of fascism and communism in the Thirties.

Theresa May has days to unite the warring factions in her Cabinet around a single vision for Brexit as they prepare to thrash out the Government’s policy in an “awayday” at Chequers on July 6.

Remainers and Leavers appeared as divided as ever yesterday as Mr Reesmogg accused the Chancellor of colluding with business leaders who have warned of dire consequences if Britain pursues a “hard” Brexit. He told Sky News: “I think there is co-operation between the Remainers in the Cabinet and some businesses, some of the more politicised businesses.”

Asked who in the Cabinet he meant, he replied: “Oh, the Chancellor. Boris Johnson was quite right when he said the Treasury is the beating heart of Remain, that’s obvious.

“We’ll see a lot of business recognise there will be opportunities from leaving as well as concerns that they want to suck up to the Treasury.”

A Treasury source said any suggestion it was trying to undermine government policy was “nonsense”. Yesterday David Gauke, the Justice Secretary, backed his fellow Europhile Greg Clark, the Business Secretary, who has said that “the voice of business must continue to be heard”.

Mr Gauke said business “drives wealth and prosperity” and warned against being “dismissive” of its concerns. However, he was rebuked by Steve Baker, a Brexit minister, after suggesting that Britain should aim for access to the single market for goods and financial services after Brexit.

Mr Baker said: “Government policy is, and must remain, to leave the EU’S internal market as we leave the EU.”

Splits over Brexit also led to the resignation yesterday of Andrew R T Davies, the Conservative leader in the Welsh Assembly.

Meanwhile, Mr Blair was ridiculed for citing the Thirties – when fascism took hold in Nazi Germany – in a speech about Brexit and globalisation.

Speaking at Chatham House in central London Mr Blair said that the West was in danger of “losing sight of the values” which brought it together and which “saw it through the menace of fascism and communism”.

He added that if populism continued: “Then the comparisons with the Thirties no longer seem so far-fetched.”

The Eurosceptic MP Peter Bone said: “The people have made the decision to leave the European Union. What that has to do with Nazism, I have no idea”.

EU leaders gather in Brussels today for a two-day summit that had been billed as a defining moment for Brexit. Yet the subject will hardly be mentioned. The main items on the agenda are defence, immigration, security and the euro. They will get to the small matter of the UK’S withdrawal deal tomorrow; but since the Government has yet to frame a policy that can be subjected to detailed negotiations, the discussion will be perfunctory.

Given the EU’S current preoccupation with the migration crisis on its southern borders, perhaps it is better to postpone the Brexit discourse since it cannot be resolved until the Cabinet meets next week to thrash out a final position, though we have heard this before. A white paper is promised shortly afterwards setting out the precise UK negotiating position.

As the summer holidays are about to begin, there is no guarantee that anything substantial will be resolved by the next EU summit in October. This prevarication is taking the country perilously close to the cliff-edge, no-deal Brexit that Theresa May has pledged to avoid.

It allows those who want to stop Brexit to fill the gap, as Tony Blair, the former Prime Minister, sought to do again yesterday. He said talks were “drifting” and may have to continue beyond the exit date. They almost certainly will; but that does not change the fact that the UK will leave the EU on March 29 next year. The country voted to do so in a referendum and Parliament supported the triggering of Article 50 by a substantial majority in the full knowledge of the exit date, which is now enshrined in law by the EU Withdrawal Act. By what constitutional or democratic rationale does Mr Blair think these decisions should be reversed?

The former Labour leader said this could be achieved through another referendum and the EU would delay the process while it was arranged, in the expectation on his part that the country would change its mind. It won’t. And the reason it won’t is what is happening in the EU, as it struggles to cope with deep disagreements over immigration and the management of the euro bloc, where unemployment in the south is high, especially among the young. Mr Blair said “the people must make the final decision”, but they already have. He should use his influence in Brussels and contacts with EU leaders to defend his country’s interests, not undermine them.