The Chancellor has laid down a marker on Brexit, making the case for a smooth exit from the EU that avoids a “damaging cliff edge”.
In a keynote speech to City leaders at Mansion House, Philip Hammond stressed Britain would leave the EU “in a way that prioritises British jobs and underpins Britain’s prosperity” and said immigration will be managed but not “shut down”.
The address will be seen as a fresh marker in the internal Cabinet battle over Brexit, with Mr Hammond favouring an approach that puts businesses first, while colleagues including Prime Minister Theresa May have made immigration controls a red line in negotiations.
Labour’s John McDonnell said the Chancellor’s speech shows how divided the Government is on its Brexit approach, with the shadow chancellor telling Sky News Mr Hammond is “shouting through the letter box of Number 10”.
He said: “What we’re seeing is different versions of interpretations of what Brexit should be or would be from different parts of the Conservative party, but also even from the same individuals, changing within the space of a month.
Video: UK makes concession on Brexit talks
“You cannot be in a situation where you’re in negotiations and people treat you seriously, if you’ve got a divided party like that, but also if you’re changing your position so radically within the space of weeks.”
In his speech, Mr Hammond signalled the UK would try to maintain the “frictionless” border arrangements of the EU’s customs union for an “implementation period” after leaving.
The Chancellor insisted the economy must be a priority as Britain negotiates with Brussels, saying the public “did not vote to become poorer” when they backed Brexit in last year’s referendum.
Mr Hammond said: “We recognise that this is a negotiation, and our negotiating counterparts, while broadly sharing our desire for a close ongoing relationship, will have their own priorities.
“So we must be clear about ours.
Video: Brexit Secretary: ‘We’re off to a promising start’
“I have said before, and I remain clear today, that when the British people voted last June, they did not vote to become poorer, or less secure.
“They did vote to leave the EU. And we will leave the EU. But it must be done in a way that works for Britain. In a way that prioritises British jobs, and underpins Britain’s prosperity.
“Anything less will be a failure to deliver on the instructions of the British people.”
Mr Hammond outlined his three priorities for a “Brexit for Britain”:
:: A comprehensive free trade agreement for goods and services:: Transitional arrangements “to avoid unnecessary disruption and dangerous cliff edges”:: “Frictionless customs arrangements” for cross-border trade and “crucially” to maintain the “open and free flowing” Irish border
Video: Tory administration ‘united’ on Brexit
“To do this in the context of our wider objectives will be challenging,” the Chancellor said.
“It will almost certainly involve the deployment of new technology.
“And therefore we’ll almost certainly need an implementation period, outside the customs union itself, but with current customs border arrangements remaining in place, until new long-term arrangements are up and running.”
The future of the British economy is “inexorably linked” to the kind of deal Britain strikes with the EU, Mr Hammond told the audience.
Brexit negotiations kicked off on Monday with Brexit Secretary David Davis meeting the EU’s chief negotiator, Michel Barnier, in Brussels.
Video: Government in ‘disarray’ on Brexit
Mr Hammond described the talks as a “positive start”, but warned it “will get tougher”.
“But we are ready for the challenge and confident that we can deliver for British jobs, British businesses, and British prosperity,” he added.
Sky’s Political Correspondent Lewis Goodall said Mr Hammond’s speech was “extraordinary”, and added: “(He’s) given up pretending he thinks there are benefits to Brexit. Confirmation that May’s authority has gone.”
Europe Correspondent Mark Stone said: “I imagine they’ll be watching in Brussels and wondering, just a little, who to listen to – Theresa May and David Davis or Philip Hammond.”
Bank of England Governor Mark Carney also addressed the audience at Mansion House, and told them “now is not yet the time” for a rise in interest rates.
Source: SKY News Feed