Last minute Brexit deal rejig 'delusional', says Hammond
An 11th-hour renegotiation of the Brexit deal to strike better terms was “delusional” and a no-deal outcome “two awful to contemplate”, Chancellor Philip Hammond warned on Thursday.
He told parliament there were no alternatives to the proposals put forward by Prime Minister Theresa May as she mounted a charm offensive to win over rebels in the Conservative Party ahead of next Tuesday's crunch vote on the deal.
Hammond's remarks came after reports that some members of the Cabinet were calling on May to halt the key ballot as they feared a defeat by at least 100 votes, which could bring down her government.
May held an informal meeting with cabinet ministers at Downing Street as the likelihood of a no-deal scenario grew more realistic.
Hammond addressed MPs in the House of Commons on the third day of the Brexit debate in parliament.
“I have observed this process at close quarters for two and a half years and I’m absolutely clear about one thing – this deal is the best deal to exit the EU that is available or that is going to be available,” he said.
“The idea that there’s an option of renegotiating at the 11th hour is simply a delusion.”
He warned that no-deal would be an act of "economic self harm" and the consequences were “too awful to contemplate”.
"I have heard that we have nothing to fear from no deal—nothing, that is, except a cliff-edge Brexit in just four months’ time; the end of frictionless trade with our biggest export market; restrictions on our citizens travelling in Europe; and being the only developed economy in the world trading with the EU on purely WTO terms with no customs facilitation agreements, no data sharing or protection agreements and no approvals regime to allow our industries to trade with their nearest customers and suppliers—just tariffs, paperwork and bureaucracy."
"UK car exports would face tariffs of 10%. Many clothing exports would face tariffs of 12%. Agricultural exports would face even higher tariffs. Almost 90% of UK beef exports and 95% of lamb exports go to the EU, where they could face tariffs of over 70% and 45% respectively."
"I do not believe that we can afford the economic cost of a no-deal exit."
IRELAND BACKSTOP VOTE OR TRANSITION EXTENSION?
May was reportedly floating the option of giving MPs a vote on either the Brexit Irish backstop or extending the transition period beyond December 2020.
As her government staggered towards a vote on the withdrawal deal to leave the European Union, May's thin veneer of authority lost another coat she gave a radio interview on Thursday morning that hardly inspired confidence in her ability to win over fractious Tory MPs.
On Wednesday it was revealed that Britain could be locked indefinitely into the proposed Brexit backstop arrangement on Northern Ireland, according to the government's legal advice.
This was deemed unacceptable to Brexiters as it left the UK following EU rules in order to avoid a hard border with Ireland.
May had initially offered a vote on implementation of the backstop, which would come into force if the UK exits the EU with no future deal. On Thursday she appeared to add the option of extending the transition deal until December 2022.
Neither option is new territory. Both are in the withdrawal agreement submitted by May's government to the EU last month.
In a BBC interview, May said she was looking at parliament's role on the issue.
“There will be a choice between, if we get to that point, a choice between going into the backstop and extending the transition period. Now, there are pros and cons of both sides of that,” she said.
“People have a concern of the backstop, that we could be in it indefinitely. But in the backstop we have no financial obligations, we have no free movement, we have very light level playing field rules with the EU.”
“In the implementation period, we still have to negotiate the terms, but, there will be concerns about the fact that they would require, I’m sure they would require, some more money to be paid, for example.”
The backstop has been seen as a major sticking point between both Leave and Remain supporters.
Under the withdrawal proposal, Northern Ireland would stay aligned to some rules of the EU single market if another solution isn't found by the end of the transition period in December 2020.
The whole of the UK would enter a “single customs territory” with the EU with effectively no tariffs on trade in goods between the UK and the EU and some (though not all) trade restrictions removed.
However, Northern Ireland would remain aligned to some extra rules of the EU’s single market to ensure the border between Northern Ireland and the Republic of Ireland remained open.
These separate regulations for Northern Ireland mean there would be some checks on goods entering the province from the rest of the UK. This idea infuriates hardline Unionist leavers because they do not want to see one part of Britain treated differently.
May needs agreement on the backstop because the EU will not agree to the transitional period and subsequent trade talks until it is in place.