Brexit: Hammond to warn Tories over no-deal ‘hijack’

Philip Hammond on a visit to the UK Atomic Energy AuthorityImage copyright Reuters

Chancellor Philip Hammond is to warn prospective Conservative leadership contenders against “hijacking” Brexit by “knowingly inflicting” a damaging no-deal exit on the economy.

In a speech to the CBI, he will urge Tories not to ape the “populist right” by claiming a clean break from the EU is the only “truly legitimate Brexit”.

It comes as Theresa May prepares to discuss her Brexit plan with cabinet.

No 10 has promised a “bold, new offer” to try to win over Labour MPs.

The Commons will vote on the Withdrawal Agreement Bill – legislation required to bring the withdrawal agreement negotiated with the EU into British law – in the first week of June.

MPs have rejected the withdrawal agreement three times and if the bill falls at the first attempt, the prime minister is likely to come under intense pressure from Conservatives to stand down.

Talks with Labour on finding a compromise deal acceptable to their MPs broke down last week.

But Downing Street hopes to appeal to Labour MPs committed to Brexit with new proposals to protect and enhance employment rights and environmental standards outside the EU.

On Sunday, International Development Secretary Rory Stewart suggested the two sides were “half an inch apart” on key issues and “sensible” Labour MPs could be won round.

The cabinet is also expected to discuss planning for a no-deal exit, which remains the default legal position if the UK does not agree a deal before the 31 October deadline for leaving.

‘No mandate’

But Mr Hammond will warn business leaders on Tuesday that there is “no mandate” for such an outcome and that even with “all the preparation in the world” it would be highly damaging.

“To advocate for no deal is to hijack the result of the referendum and in doing so knowingly to inflict damage on our economy and our living standards,” he will say.

He will say he will continue to make the case for a negotiated exit, based on what he regards as the “absolute obligation to protect jobs, businesses and future prosperity”.

“We need to be clear, that if we do not resolve this issue in the next few weeks, there is a real risk of a new prime minister abandoning the search for a deal, and shifting towards seeking a damaging no-deal exit as a matter of policy.”

If the UK left the EU without a deal, it would trade with the bloc using World Trade Organization rules.

On Sunday, Brexit Party leader Nigel Farage said that was now “the only way the democratic will of the people can be delivered”.

The UK was originally due to leave the EU on 29 March, but the deadline was pushed back when MPs failed to approve Mrs May’s deal.

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