Theresa May’s Cabinet has not agreed what kind of Brexit it wants the UK to end up with, the Chancellor has revealed.
Philip Hammond let slip to MPs that the Tory government’s most senior ministers had yet to discuss, let alone approve, any “end state” plan for Brexit after 2019.
His remarks, which were seized on by critics as “beyond parody”, came on a day of fresh embarrassment for the Prime Minister as:
DUP leader Arlene Foster finally phoned May but failed to agree on a detailed Brexit plan
Irish PM Leo Varadkar told May that he would not budge over a draft plan for cross-border Ulster trade
David Davis admitted that his department had not conducted any formal assessments of the impact of Brexit on the economy
Tory backbencher Jacob Rees-Mogg warned that her ‘red lines’ were looking ‘a bit pink’
No10 had to slap down Hammond for suggesting the UK should pay its ‘divorce bill’ even before sorting a trade deal
More than 18 months after the EU referendum, it remains unclear whether the UK wants a ‘soft Brexit’ that will replicate current trade links or a ‘hard Brexit’ that would give it freedom to strike deals with other countries.
Hammond stunned MPs when he told the Treasury Select Committee that the Government had not yet discussed the precise kind of Brexit it wanted.
“The Cabinet has had general discussions about our Brexit negotiations, but we haven’t had a specific mandating of an end-state position,” he said.
The Chancellor said that even Cabinet sub-committees had not discussed the matter, arguing it would occur only after the UK had made “sufficient progress” in Brexit talks.
But Labour MP Alison McGovern, speaking for the pro-EU group Open Britain, hit out: “This is beyond parody. The government is flailing around trying to get agreement to move on to talks on the future UK-EU relationship.
“Yet they don’t even know what they want that relationship to be once they make that progress. They are breathtakingly dysfunctional.”
Downing Street said later that the Cabinet would discuss the “end state” at one of its meetings before the end of this year.
Brussels has spent months complaining that about the mixed messages from the UK government on Brexit and may now seize on the new admission as proof that its plans for a ‘trade and transition’ talks are still unformed.
Relations between No.10 and the Treasury were further strained when Hammond suggested to MPs that the UK should pay its £50bn divorce bill even if the UK left the EU without a trade deal.
The Chancellor told MPs it was “inconceivable” the UK would walk away from its pensions and other spending commitments to the EU.
“That’s not the kind of country we are and frankly it would not make us a credible partner in future international agreements,” he added.
Within an hour, a spokesman for the Prime Minister contradicted Hammond, saying: “Nothing is agreed until everything is agreed, and that applies to the financial settlement.”
May was already reeling from the collapse of a planned breakthrough on Brexit earlier this week, after her Democratic Unionist Party allies’ refused to sign off a draft deal on trade between Northern Ireland and the Irish republic.
Downing Street had hoped May would be able to travel to Brussels for fresh talks later this week, but continuing unease among the DUP appeared to torpedo the plan.
Foster finally contacted the PM by phone on Wednesday, a day after she had been expected to ring to discuss the crisis.
The call was described as “constructive”, although No.10 refused to say if the pair would meet in coming days, adding their contacts were an ‘ongoing process’.
May insisted in Prime Minister’s Question Time that she had made “very good progress” in Brexit talks, but hinted that one way out of the impasse was to park detailed solutions for Northern Ireland until ‘Phase 2’ of the negotiations moved on to trade.
No.10 said after a phone call with Varadkar: “The Prime Minister said we are working hard to find a specific solution to the unique circumstances in Northern Ireland that respects the integrity of the UK, the European Union and the Belfast Agreement.”