- Chancellor Philip Hammond drops biggest hint yet that he wants a very soft Brexit.
- Hammond told Davos he wants “very modest changes” to the current UK-EU relationship.
- He called for the “closest possible relationship between the EU and the UK post-Brexit.”
- Pro-Brexit Conservative backbenchers are becoming increasingly frustrated with the government.
LONDON – Chancellor Philip Hammond has made a significant intervention in the Brexit debate by calling for only “very modest” changes to Britain’s current relationship with the European Union.
Speaking at the World Economic Forum in Davos on Thursday, the chancellor called for the “closest possible relationship between the EU and the UK post-Brexit” in a speech that will likely rile Conservative backbenchers.
Brexit “will not be reversed,” Hammond insisted. However, he hinted at a UK-EU relationship which will look very similar to Britain’s EU membership in trade, customs and legal terms.
“So instead of doing what we’re normally doing in the trade negotiations – taking two divergent economies with low levels of trade and trying to bring them closer together to enhance that trade…
“We are taking two completely interconnected and aligned economies with high levels of trade between them, and selectively, moving them, hopefully very modestly, apart,” Hammond told political and business figures from around the world.
He added: “In my opinion, starting with what we have got and working out what we need to subtract to get to a workable future model that respects everybody’s red lines is a more preferable way forward than starting with a blank sheet of paper which is what the Canada model would entail.”
He paid tribute the speech CBI director-general Caroline Fairbairn gave earlier this week which called for Britain to remain in the customs union after it leaves the EU.
“I welcomed Carolyn Fairbairn’s speech on Monday this week. For the contribution it made to the ongoing debate,” he said.
He also suggested that current immigration rules are likely to be little changed.
“We want to maintain the closest possible relationship in people to people exchanges,” he said.
The chancellor’s speech did not go into specific red-lines but it was perhaps the clearest indication yet that at least one senior member of Theresa May’s government wants to pursue a very soft Brexit.
His remarks will be sure to anger Tory Brexiteers like Jacob Rees-Mogg.
Rees-Mogg on Wednesday accused Brexit Secretary David Davis of being “weak” and turning Britain into a “vassal state” by keeping it closely-wedded to EU transitions during the proposed two year transition period.
The MP for North East Somerset is set to make a speech on Thursday evening calling for a “fundamental” change to the government’s tone on Brexit.
He will describe close alignment between the UK and EU after Brexit as unacceptable and urge the government to not keep Britain in the customs union.
“The government’s tone on Brexit needs to fundamentally change. If [Brexit’s opportunities are] taken off the table then Brexit becomes only a damage limitation exercise,” he is set to say.
“The British people did not vote for that. They didn’t vote for management of decline.”
This collision between the Conservative Party’s soft and hard Brexiteers comes amid more speculation about May’s future as party leader.
Sir Graham Brady, who chairs the party’s influential 1922 Committee of backbench MPs, has reportedly urged Tory MPs not to submit any more formal demands for a leadership contest amid speculation that a number of MPs have submitted letters demanding a change in leadership in recent days.
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