Hammond Praised Over Call To Avoid 'Cliff Edge' Brexit

Hammond Praised Over Call To Avoid 'Cliff Edge' Brexit

Chancellor Philip Hammond has been praised by business leaders and supporters of a "soft Brexit" for emphasising the need to put jobs and prosperity first when negotiating Britain's exit from the European Union.

Mr Hammond also drew plaudits for stressing the importance of transitional arrangements to avoid a "cliff edge" Brexit, including the maintenance of "frictionless" customs union border arrangements for an "implementation period" after leaving the bloc.

In a keynote speech to City leaders at Mansion House, the Chancellor again signalled his soft Brexit credentials by stressing Britain would leave the EU "in a way that prioritises British jobs and underpins Britain's prosperity".

Part of this will include ensuring immigration is managed but not "shut down", Mr Hammond said, as he stressed that boosting growth is the only way to end the "hard slog" of austerity.

Soft Brexit advocates including Liberal Democrat leadership candidate Sir Vince Cable and senior Labour MP Chuka Umunna urged others in Government to take note of Mr Hammond's approach.

Financial services lobby group TheCityUK, the Federation of Small Businesses (FSB) and the Institute of Directors (IoD) were among the industry voices who backed the Chancellor's focus on the economy.

Shadow chancellor John McDonnell seized on the speech as fresh evidence that Mr Hammond was trying to "distance himself" from Theresa May's prioritising of immigration controls, illustrating the weakness of the Prime Minister and the "disarray" the Government finds itself in.

In his address, Mr Hammond said he was not turning a "blind eye" to a "growing tide of hostility" against globalisation and mass immigration, and stressed he would push for a new phase of world trade that "delivers clear benefits for ordinary working people".

But he added: "Just as the British people understand the benefits of trade, so too they understand how important it is to business to be able to access global talent and to move individuals around their organisations.

"So while we seek to manage migration, we do not seek to shut it down."

Mr Hammond insisted the economy must be a priority in Brexit talks, noting that British people "did not vote to become poorer".

He said: "We recognise that this is a negotiation, and our negotiating counterparts, while broadly sharing our desire for a close ongoing relationship, will have their own priorities.

"So we must be clear about ours.

"I have said before, and I remain clear today, that when the British people voted last June, they did not vote to become poorer, or less secure.

"They did vote to leave the EU.

"And we will leave the EU.

"But it must be done in a way that works for Britain.

"In a way that prioritises British jobs, and underpins Britain's prosperity.

"Anything less will be a failure to deliver on the instructions of the British people."

Mr Hammond outlined his three priorities for a "Brexit for Britain" - a comprehensive free trade agreement for goods and services, transitional arrangements "to avoid unnecessary disruption and dangerous cliff edges", and "frictionless customs arrangements" for cross-border trade and "crucially" to maintain the "open and free-flowing" Irish border.

"To do this in the context of our wider objectives will be challenging," he said.

"It will almost certainly involve the deployment of new technology.

"And therefore 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."

The Chancellor called for a "pragmatic" approach to financial services and said the UK must engage with the EU's "genuine and reasonable concerns" about regulation given Britain's desire to leave the jurisdiction of the European Court of Justice.

Insisting the Government was "ready for the challenge" of exit talks, Mr Hammond said: "The future of our economy is inexorably linked to the kind of Brexit deal that we reach with the EU.

"And I am confident we can do a Brexit deal that puts jobs and prosperity first - that reassures employers that they will still be able to access the talent they need, that keeps our markets for goods and services and capital open, that achieves early agreement on transitional arrangements, so that trade can carry on flowing smoothly, and businesses up and down the country can move on with investment decisions that they want to make but that have been on hold since the referendum.

"The collective sigh of relief will be audible."

Mr Hammond also signalled Britain could seek access to money from the European Investment Bank (EIB) after Brexit and announced an expansion of domestic support for capital investment.