Hammond has no part to play in Brexit Cabinet
To leave the EU with the best Brexit deal possible, the Prime Minister needs a Cabinet that is fully committed to securing Britain's future outside the European Union, says Peter Lyon.
Contrary to rumours circulating before Christmas, Philip Hammond has retained his position as Chancellor of the Exchequer in this week's reshuffle – despite the Prime Minister, apparently, wanting to move him aside for some time. On numerous occasions during the Brexit negotiations, the former Remain campaigner has acted contrary to the national interest by his words and actions, potentially harming our objective to get the best Brexit deal for the United Kingdom, outside the Single Market and Customs Union. Leave voters across the country will be concerned about Theresa May's decision to maintain Hammond's role at the centre of Government.
Ever since the EU Referendum, Hammond has been the most prominent member of the Cabinet constantly pushing for a soft Brexit. In Cabinet discussions, he has favoured remaining tied to the Single Market and the Customs Union – according to him, to prevent disruption to business. Yet any deal which keeps the UK in the Single Market would mean continuing the jurisdiction of the European Court of Justice (ECJ) and the free movement of people. Maintaining a Customs Union with the EU would prevent Britain signing free trade deals with countries around the world like the US, Australia and China – a key benefit of Brexit.
The Chancellor has favoured a long stand-still transition period, but this would have meant continuing Freedom of Movement and ECJ jurisdiction for many years into the future. Fortunately, it now looks likely the transition period will end on 31st December 2020, after this was suggested by Michel Barnier. Hammond does not appear to realise, or want to recognise, regaining control of immigration was one of the key motivations for many during the Referendum campaign. Across the country there are significant concerns about the effect of mass immigration on communities, public services and jobs. The Government must declare when Freedom of Movement will end and announce a new system of immigration controls. Such an announcement by the Home Office would reassure Leave voters of Remain-supporting Home Secretary Amber Rudd's commitment to getting the best for Britain from Brexit.
Being prepared to walk away from the table is a basic tactic in any negotiation. In order to achieve a good deal with the EU, we must also show we are ready to walk away and leave without a bad deal if that's all that's on offer. However, appearing before the Treasury Select Committee in October, Hammond shockingly refused to commit any funds for Brexit, including to prepare Britainfor a possible No Deal scenario – for example on customs arrangements – until the "very last moment". Just minutes later, the Prime Minister was forced to rebuke her Chancellor, reassuring MPs: "We are committing money to prepare for Brexit, including a No Deal scenario."
Brexit tensions between Hammond and Leave-supporting Ministers have happened before. In November, Hammond's reluctance to get behind Brexit forced Leave campaigners – Environment Secretary, Michael Gove and Foreign Secretary, Boris Johnson – to write a secret letter to the Prime Minister, later leaked to the Daily Telegraph, urging her to ensure the Treasury provided money for No Deal preparations. The leaked letter accused Hammond of lacking "sufficient energy" to deliver a clean Brexit. But disappointingly, after this week's reshuffle, Hammond is still in place!
After a massive Divorce Bill of around £40 billion was supposedly agreed between UK and EU negotiators as part of Phase 1 of the Brexit talks in December, the Chancellor had the temerity to say said it was "inconceivable" this money would not be paid –even if a beneficial deal on our future trading relationship was not agreed! This ludicrous suggestion of Britain still on the hook to pay a huge £40 billion for nothing in return, was again quickly refuted by the PM, who reiterated: "Nothing is agreed until everything is agreed."
Last week, Hammond apparently refused to rule out Britain staying in a permanent Customs Union with the EU. If this prevents the UK operating an independent trading policy with our potential global partners, this would represent a major betrayal of the Brexit vote.
At every stage in the Brexit talks so far, Hammond has been a huge obstacle to a real Brexit. He has forced the Prime Minister to issue denials and has exasperated Eurosceptics, both in the country and in Parliament. It is a huge shame she has not managed to get rid of him from the Cabinet.
This week Hammond and Brexit Secretary David Davis are visiting Germany to press for a bespoke trade deal with the UK. After his previous pronouncements, we cannot trust him to make our case properly and not to give unnecessary concessions to EU leaders. Let's hope that with Davis tugging at his coat tails, this will not happen.
As the Government moves into Phase 2 of the negotiations, it must decide whether to pursue an approach of divergence or alignment in its future relationship with the EU. The Prime Minister is expected to articulate her position in a speech, possibly at the end of next week – and must not be weakened by the negative influence of the Chancellor.
In order to achieve the full benefits of Brexit, the UK must be able to take back control of its own regulations and negotiate its own trade deals. This would not be possible under regulatory alignment. Hammond is thought to be the leading opponent of this in the Cabinet. If so, this just goes to prove he has still not come to terms with the EU Referendum result!
Mrs May's decision to keep Hammond in charge of the Treasury is of huge concern. Replacing him with a Brexiteer Chancellor, as speculated before Christmas, would have given a clear signal of May's commitment to properly leaving the EU, including the Single Market and Customs Union.
This week's reshuffle was a momentous opportunity to recalibrate the Government's Brexit policy in the run up to Phase 2 of the negotiations. Clearly many of the appointments made were about shoring up the Conservative Party itself in advance of local government elections in May. It is disappointing there was no appointment of a Cabinet-attending 'No Deal' minister, in spite of rumours. However, it's good news the prominent Brexit campaigner Suella Fernandes has been appointed to an additional role in the Department for Exiting the EU (DExEU) of Parliamentary Under Secretary of State. This enlargement of DExEU with an MP who strongly believes No Deal is better than a bad deal is most welcome.
If the Prime Minister had been much bolder, and got rid of Brexit-toxic elements of the Party in Cabinet, she would have gained much respect – not only from the Party, but also from the Great British Public. Brexit supporters should be very worried about Philip Hammond's ongoing influence in the Cabinet, as we needed a confident Brexiteer Chancellor to get the best from our leaving the EU.
To leave the EU with the best Brexit deal possible, taking back control of our laws, our borders and our money, it is vital the whole Cabinet, including the Chancellor, is fully committed to Britain's future outside the EU. With such a large Remain contingent at the heart of our Government, as well as in Parliament, Get Britain Out is not sure we will get the best possible Brexit the United Kingdom needs. Only time will tell.
