Chancellor Philip Hammond is to warn that a Boris Johnson-led Tory party would “hijack” Britain with a damaging no-deal Brexit.
In his most outspoken attack yet on hardline Eurosceptics, Hammond will use a City speech to let rip at all politicians who want the UK to quit the EU without an agreement with Brussels.
As the Cabinet prepares for a crunch meeting on Theresa May’s fourth attempt to sell her Brexit deal to MPs, the chancellor also appeared on collision course with ministers who want to spend more money on preparations for no-deal.
The warning by Hammond, who will spell out his views to the CBI annual dinner on Tuesday night, emerged as a new ‘One Nation’ group of Tory ministers and MPs suggested that any candidate to replace May in No.10 would have to pass the “litmus test” of opposing no-deal.
“On the populist right, there are those who now claim that the only outcome that counts as a truly legitimate Brexit is to leave with no deal. Let me remind them: the 2016 Leave campaign was clear that we would leave with a deal,” he will say.
“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. Because all the preparation in the world will not avoid the consequences of no deal.”
Hammond will not name Johnson directly but Tory MPs are sure to interpret it as a reference to the former foreign secretary.
Johnson has emerged as Tory activists’ favoured choice as the next Conservative leader and prime minister, with polls putting him way ahead of his rivals as the man to see off the threat posed by Nigel Farage’s Brexit Party.
When foreign secretary last year, he famously declared “fuck business” at a diplomatic event when told that most firms were worried about the UK leaving without a deal.
But his hard line, while popular with some voters, has alarmed several ministers and pre-released extracts of Hammond’s remarks laid bare his anger at the prospect.
One ally of Johnson said he has always been very clear that the UK can and will get a deal - but no-deal shouldn’t be taken off the table in negotiations with Brussels
“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……in order to protect an ideological position which ignores the reality of Britain’s economic interests and the value of our Union,” he will add.
“I will continue to fight, in the face of this polarisation, for a negotiated Brexit; an outcome that respects the British people’s decision to leave, while recognising that there is no mandate for a no-deal exit; and that we have an absolute obligation to protect Britain’s jobs, businesses and future prosperity.”
Hammond, who has been attacked by Brexiteer backbenchers as ‘Remainer-in-chief’, has repeatedly argued that no Leave supporter voted in the 2016 referendum to be worse off economically.
However, while authorising more than £3bn to be spent on no deal contingency plans, he has until now held back from making such a withering intervention in the Tory leadership race.
His words will also be seen as a warning to both Labour and Tory MPs that failing to back May’s compromise deal risks ushering in a new PM who will take a more hardline stance with Brussels.
Hammond’s extra warning of the risk of the break-up of the UK follows similar pressure put on MPs by May’s chief of staff Gavin Barwell, who last week suggested an independent Scotland and even a ‘border poll’ on the reunification of Ireland could be triggered by a no-deal outcome.
At their meeting on Tuesday, the Cabinet will be asked to sign off on May’s Withdrawal Agreement Bill, which is expected to be published early next month in a final attempt to get her deal through parliament.
Ministers will discuss whether to include a so-called series of ‘definitive’ votes within the legislation to allow alternatives such as a public vote. Some expect that the bill could contain language on customs, as well as workers’ rights, that could appeal to Labour MPs.
In their meeting in the Commons, the newly launched One Nation Caucus of 60 MPs set out their mini-manifesto to pitch to moderate voters on issues beyond Brexit such as education, inequality and climate change.
Asked if the group could back a Tory leadership contender who advocated a no-deal Brexit, digital minister Margot James said: “I think it would be difficult for a candidate who would let the country leave without a deal to subscribe to quite a lot of those values and the policies that flow from them.”
“I don’t think many candidates are going to stand up and say ‘I think the country should leave without a deal’. No.
“But there are candidates who will go out of their way to make sure the country doesn’t leave without a deal and that is what we need to ensure we get out of this leadership contest.”
Prisons minister Robert Buckland said: “This will be a litmus test for candidates to mark themselves against, that is the whole point. We want to bring it back to policy.”
Work and Pensions Secretary Amber Rudd said that moderate Conservatives had a long tradition in the party.
“Sometimes our voices aren’t heard quite as vocally as they should be...And we believe that this time, more than ever, we need to shape the changing Conservative Party.”
Senior backbencher Sir Nicholas Soames said that the debate in the party “has been drowned out by the very aggressive and intolerant tone of the ERG”.
″What we are relaunching here today is that long Tory tradition of tolerance, pragmatism, of not being ideological but an absolute determination to get these values back front and centre of the Tory party for the future.
“I’ve had an absolute flood of emails of people saying thank God someone is at last talking about the Tory party I used to know.”
Late on Monday, Johnson tweeted his support for the One Nation group’s manifesto.
But former minister former minister Richard Benyon told HuffPost: “I bet every leadership candidate from whatever part of the Conservative spectrum will espouse the words ‘One Nation’. Our job is to make sure they mean it.”
Earlier Home Secretary Sajid Javid refused to be drawn on the Tory leadership battle or its contenders.
“Whether I will be one of those, you’ll just have to wait and see.”