Hammond faces mutiny from Brexit ministers
BREXIT ministers have demanded Philip Hammond pay for hundreds of extra officials amid fury that departments have been forced to find cuts.
Senior figures in the three Whitehall departments delivering Brexit have told The Sunday Telegraph that the Treasury must agree to tens of millions of pounds of extra funding.
Failure to do so would “undermine Britain’s trading future” and a drive to forge new links across the world, ministers will argue in spending talks.
Both the Foreign Office and the trade department have been ordered to outline 6 per cent spending cuts, although the Brexit department is exempt.
The growing row follows a damaging week for the Chancellor as he was forced to scrap a key part of his first ever Budget.
On Wednesday it was announced
Leader in Lords told Chancellor U-turn was ‘inevitable’ as numbers did not stack up to make it law
In the end, it took less than an hour for Philip Hammond to agree that one of his Budget’s biggest revenue raisers should be scrapped. Summoned to No 10 at 8am on Wednesday, the writing had been on the wall after days of damaging headlines and Tory rebellion.
Exactly a week before, he had been briefing ministers in the Cabinet room about his Budget plans, with the exception of one crucial topic – how raising National Insurance broke their manifesto. Now, a stone’s throw away in the Prime Minister’s personal office, the Chancellor came face-to-face with the full scale of that political misjudgment.
Theresa May was flanked by her parliamentary eyes and ears – Gavin Williamson, the Chief Whip, and Baroness Evans of Bowes Park, the Leader of the Lords – who gave a bleak assessment of the situation.
Mr Williamson, whose whips had been frantically calling rebels to sense the scale of the backlash, said the legislation needed had no guarantee of passing. Lady Evans went further – if the law did squeak through the Commons it would be killed off by the Lords, who had no qualms about defeating the manifesto breach.
Those familiar with the conversation repeat one word: “inevitable”. The numbers were not there, the measure had to be scrapped.
As Mr Hammond went next door to pen a “Dear Colleague” letter announcing a remarkable about-turn that would hit inboxes at 11.37am, Treasury figures were left “gutted”.
Just hours earlier, at 8pm on Tuesday, Mr Hammond’s supporters had been telling Tory rebels that there would be no backing down. They had no indication an about-turn was coming.
Allies insist the decision was taken jointly. “He didn’t say to me: I was forced into this,” said one who has discussed it with the Chancellor. “A discussion took place, the advice was taken and a decision made.”
But there is little doubt that No10 had been left furious by anonymous briefings from Treasury loyalists – including to this newspaper – that Mrs May and her team were to blame. “Theresa has a very loyal and uncompromising team around her. They are fiercely loyal to her,” said one source regularly in No10. “Philip has a great team, but we’ve all only been in office after eight months. There is a bit of teething problems at the adviser level if I’m honest.” The blunders have triggered a wave of speculation across Whitehall – could Mr Hammond, less than nine months into the job, become Mrs May’s first Cabinet casualty? Certainly there are some Tory vultures circling. “Colleagues are asking why this Chancellor is dishing out punishment beatings to entrepreneurs and to our own voters,” said a backbencher. “Most people want him gone by May after the local elections. He is just not up to the politics of the job.” And the rebellions over the Budget appear not to be over. More than 20 Tory MPs have concerns about a raid on dividends, according to some backbenchers.
However, much weight is being put on the friendship – or at least personal affection – between Mrs May and Mr Hammond, Oxford University contemporaries. One minister who has known them for decades says they are the “same type of Tory”. Another government source says they see “eye-to-eye” over the need to control the country’s finances.
“They meet regularly for breakfast and meals. He’s very, very close to her. He is the same age, he is the same vintage,” says one Treasury figure. “Do they agree on everything? Of course they don’t. But Philip is extremely courteous to colleagues about her and is always complimentary.”
And then there is the living situation – Mr Hammond lives in No10’s flat, while Mrs May is stationed in No11. “You often see his two dogs wandering through being taken for a walk by Mrs Hammond,” says a No10 source.
The Chancellor’s allies for their part are scathing about the idea he will be sacked, calling it “extremely unlikely”.
“The notion that someone like Greg Clark [the Business Secretary] could fill his boots is absurd,” said one close to Mr Hammond. “I think for most of the parliamentary party that is the same. I don’t know who the credible figure is to replace him.”
More interestingly, some in No10 have decided they would be damaged by a sacking, too – coming less than a year after Mr May gave Mr Hammond the role. “A reshuffle to move the Chancellor this May would be very damaging and look very weird,” said one senior source. “I can see people are talking about it this week. I think it would have gone within a few weeks.
“Within a year of forming a Government to have a reshuffle would look like a sign of weakness.”
But the source added: “Within 18 months of taking office? Maybe.”
Perhaps most fascinatingly of all, key Eurosceptics are rowing behind Mr Hammond for now – through the medium of a secret WhatsApp group.
Shortly after his about-turn, a message went out on the social media chatroom involving more than 40 Tory Eurosceptics. “Give every support to Hammond,” it read, according to a source.
Days earlier the Brexiteers had been told that attacks on the Chancellor’s Eurosceptic credentials were “ludicrous and disruptive” – another clear message.
Senior Leavers have told Mr Hammond’s Treasury allies that only a handful of their rank are out to get him; the rest will remain supportive.
Aware of his fractured links, Mr Hammond has invited his backbenchers round for drinks. The invites, which dropped on Monday, have been dismissed by some.
“I’m not going to fall for the vinegary white wine and c--- canapé offensive,” said one. But others have decided differently – more than 100 are expected to turn up.
For No10 and No11, it is a case of “ball dropped” but carrying on as one.
“We all missed [the manifesto issue], we are all kicking ourselves and now we get over it,” said a Treasury figure. “We have recognised we’ve got to work closer together, but there really is not a big falling out. We are not in Gordon Brown territory.” For now at least.
‘Within a year of forming a Government to have a reshuffle would look weak. Within 18 months? Maybe’