The chancellor of the exchequer has demanded Britain remains subjected to the existing customs arrangements of the EU, unable to make new trade deals, until a new “long term” system is agreed.
Philip Hammond – a stanch Remainer who has advocated a “soft-Brexit” inside the Single Market – also appeared to contradict the prime minister’s position on immigration. Futhermore, he did not confirm that the UK would leave the bloc without a deal if the offer is poor.
He echoed the rhetoric of Labour and their shadow Brexit secretary, Sir Keir Starmer, by saying Brexit must “prioritise British jobs” and by playing down the importance of reducing immigration.
The comments risk opening a divide between Mr. Hammond and Theresa May and Brexit Secretary David Davis. With Brexit talks already underway, confusion about the UK’s position could cause alarm.
Giving a keynote speech to City leaders at Mansion House, Mr. Hammond said: “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.”
He claimed a comprehensive free trade agreement was the key to achieving a “Brexit for Britain” and said it would require frictionless borders, where goods can flow freely.
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Subject to current customs arrangements, the UK is unable to strike free trade deals with growing markets outside the bloc. However, Mr. Hammond argued the UK would be better off inside in the short term, avoiding the risk of tariffs.
“I am confident we can do a Brexit deal which puts jobs and prosperity first, that reassures employers that they will still be able to access the talent they need, that keeps our market for goods, services, and capital open, achieves early agreement on transitional arrangements so trade can carry on flowing smoothly.
“The collective sigh of relief would be audible. The benefit to our economy would be huge,” he claimed.
Whilst failing to reduce numbers s home secretary, the prime minister has talked tough on immigration as a Tory leader. Mr. Hammond’s words were in stark contrast, however.
Pointing out the Tory manifesto had called for “an open economy and a welcoming society”, he said: “While we seek to manage migration, we do not seek to shut it down.”
It was rumoured that Mrs. May was preparing to sack Mr. Hammond before the general election. But after losing her majority in the Commons and much of her authority, the chancellor has remained in position.
His calls for a “softer” Brexit come alongside the demands of Scottish Tories leader Ruth Davidson, who has hinted the UK should stay in the Single Market, which would mean continuing open borders.