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Philip Hammond attempts to ease concerns over hard Brexit Philip Hammond attempts to ease concerns over hard Brexit
(about 4 hours later)
Philip Hammond has sought to allay fears that the economy will be sacrificed in Brexit negotiations, with support for foreign high-skilled workers, the expectation of a favourable deal for the City and a staunch defence of the Bank of England’s independence.Philip Hammond has sought to allay fears that the economy will be sacrificed in Brexit negotiations, with support for foreign high-skilled workers, the expectation of a favourable deal for the City and a staunch defence of the Bank of England’s independence.
The chancellor, burnishing his credentials as an opponent of a hard Brexit, was hopeful a deal was possible that allowed all European nationals to remain in the UK and for UK nationals to remain in the EU.The chancellor, burnishing his credentials as an opponent of a hard Brexit, was hopeful a deal was possible that allowed all European nationals to remain in the UK and for UK nationals to remain in the EU.
He maintained the government must heed the call from voters to tighten border controls following the vote to quit the EU but restrictions would need to be relaxed to support jobs and growth.He maintained the government must heed the call from voters to tighten border controls following the vote to quit the EU but restrictions would need to be relaxed to support jobs and growth.
“As we approach the challenge of getting net migration figures down to the tens of thousands it is, in my view, essential that we look at how we do this in a way that protects our economy and protects the vital interests of our economy,” he told a parliamentary committee.“As we approach the challenge of getting net migration figures down to the tens of thousands it is, in my view, essential that we look at how we do this in a way that protects our economy and protects the vital interests of our economy,” he told a parliamentary committee.
Hammond is understood to be battling inside cabinet for a more emollient negotiating position with Brussels ahead of Theresa May invoking article 50 by March, which begins the two-year process of leaving the EU.Hammond is understood to be battling inside cabinet for a more emollient negotiating position with Brussels ahead of Theresa May invoking article 50 by March, which begins the two-year process of leaving the EU.
Some ministers are known to favour pulling out of all EU agreements and exporting to the trading bloc under standard international rules. This stance, and a speech by the prime minister at the Conservative party conference that appeared to put migration controls before the safety of the economy, have sent the pound plunging almost 18%.Some ministers are known to favour pulling out of all EU agreements and exporting to the trading bloc under standard international rules. This stance, and a speech by the prime minister at the Conservative party conference that appeared to put migration controls before the safety of the economy, have sent the pound plunging almost 18%.
May also appeared to question the Bank of England’s low interest policy and its independence from the Treasury, supported later by the former foreign secretary William Hague, further undermining confidence in the City. May also appeared to question the Bank of England’s low interest policy and its independence from the Treasury, which was supported later by the former foreign secretary William Hague, further undermining confidence in the City.
Asked by MPs on the Treasury select committee about reports that the cabinet is split, Hammond appeared to take a swipe at his Tory rivals. “Those that are undermining the effort are those that are seeking to close down that negotiating space, seeking to arrive at hard decisions that we don’t need to make at this stage,” he said. “Keeping as many options open as possible is the key to the strongest possible negotiating hand.”Asked by MPs on the Treasury select committee about reports that the cabinet is split, Hammond appeared to take a swipe at his Tory rivals. “Those that are undermining the effort are those that are seeking to close down that negotiating space, seeking to arrive at hard decisions that we don’t need to make at this stage,” he said. “Keeping as many options open as possible is the key to the strongest possible negotiating hand.”
Hammond said negotiations were necessary to win the best deal for each industry. And he said there was “no doubt” that London will remain a global financial services centre following Brexit, supported by an immigration system that acknowledges the need for employers to recruit high-skilled workers. Hammond said negotiations were necessary to win the best deal for each industry. And he said there was “no doubt” that London will remain a global financial services centre following Brexit, supported by an immigration system that acknowledges the need for employers to recruit highly skilled workers.
“I cannot conceive of any circumstance in which we would be using those controls to prevent banks, companies moving highly-qualified, highly-skilled people between different parts of their businesses. That is essential for the smooth operation of our economy.” “I cannot conceive of any circumstance in which we would be using those controls to prevent banks, companies moving highly qualified, highly skilled people between different parts of their businesses. That is essential for the smooth operation of our economy.”
Hammond was confident that perceptions on the continent of winning business from the City should it lose access to EU markets were likely to “melt away” as people realised that lost jobs and activities were more likely to go to the US or the far east, or disappear altogether.Hammond was confident that perceptions on the continent of winning business from the City should it lose access to EU markets were likely to “melt away” as people realised that lost jobs and activities were more likely to go to the US or the far east, or disappear altogether.
London is Europe’s financial services centre as well as the UK’s, said the chancellor, adding: “Anything which broke up this deep and broad pool of capital and expertise in London would be hugely detrimental to the real economy across the EU as well as the UK.”London is Europe’s financial services centre as well as the UK’s, said the chancellor, adding: “Anything which broke up this deep and broad pool of capital and expertise in London would be hugely detrimental to the real economy across the EU as well as the UK.”
Analysts welcomed Hammond’s softer tone. Kathleen Brooks, research director at City Index, said: “It gives the markets a glimmer of hope that the UK may not target a hard Brexit.”Analysts welcomed Hammond’s softer tone. Kathleen Brooks, research director at City Index, said: “It gives the markets a glimmer of hope that the UK may not target a hard Brexit.”
Asked about May’s comments and the government’s approach to monetary policy, Hammond said nothing had changed: “Monetary policy is independently determined. That will continue to be the case.”Asked about May’s comments and the government’s approach to monetary policy, Hammond said nothing had changed: “Monetary policy is independently determined. That will continue to be the case.”
Earlier, the chancellor was forced to defend his refusal to publish analysis being drawn up by the Treasury of the pros and cons of various potential Brexit deals.Earlier, the chancellor was forced to defend his refusal to publish analysis being drawn up by the Treasury of the pros and cons of various potential Brexit deals.
Labour MP Rachel Reeves was backed by committee chair and Tory MP Andrew Tyrie as she said: “We can have a public debate but it will be without the facts available to us. Labour MP Rachel Reeves was backed by committee chair, Tory MP Andrew Tyrie, as she said: “We can have a public debate but it will be without the facts available to us.
“That will be a very poor debate and I think that is a disappointing decision by the government. Taxpayers pay for the Treasury to do that work, chancellor, and I think the public and parliamentarians deserve to see that work.”“That will be a very poor debate and I think that is a disappointing decision by the government. Taxpayers pay for the Treasury to do that work, chancellor, and I think the public and parliamentarians deserve to see that work.”
But Hammond insisted: “It would not be sensible – however irritating I understand that is going to be to some people – to go into the negotiation with all of our potential negotiating positions, all of the building blocks of a negotiating position spelled out in public with the costs and benefits and consequences displayed for our interlocutors on the other side of the table.But Hammond insisted: “It would not be sensible – however irritating I understand that is going to be to some people – to go into the negotiation with all of our potential negotiating positions, all of the building blocks of a negotiating position spelled out in public with the costs and benefits and consequences displayed for our interlocutors on the other side of the table.
“I can promise you the European Union will not be arriving at the negotiations with all the downsides as well as upsides of different negotiating positions set out for us to see.”“I can promise you the European Union will not be arriving at the negotiations with all the downsides as well as upsides of different negotiating positions set out for us to see.”
He added: “We cannot have a public debate about what our negotiating position is going to be. If we were to do that, we would have no negotiating position.”He added: “We cannot have a public debate about what our negotiating position is going to be. If we were to do that, we would have no negotiating position.”