Britain's finance chief warns next PM against no-deal Brexit

A campaigner during a "March To Leave" protest in Sunderland earlier this year. Brexit supporters admit there may be short-term disruption but that in the long term Britain would thrive outside the EU. PHOTO: AGENCE FRANCE-PRESSE
A campaigner during a "March To Leave" protest in Sunderland earlier this year. Brexit supporters admit there may be short-term disruption but that in the long term Britain would thrive outside the EU. PHOTO: AGENCE FRANCE-PRESSE
A campaigner during a "March To Leave" protest in Sunderland earlier this year. Brexit supporters admit there may be short-term disruption but that in the long term Britain would thrive outside the EU. PHOTO: AGENCE FRANCE-PRESSE
FINANCE MINISTER PHILIP HAMMOND

Hammond also urges candidates to tone down irresponsible spending pledges

LONDON • Britain's Finance Minister has warned those in his party vying for Prime Minister Theresa May's job that a no-deal Brexit would imperil the economy, and urged candidates to tone down irresponsible spending pledges.

Mrs May's departure deepens the Brexit crisis as a new leader, who should be in place by the end of July, is likely to want a more decisive split, raising the chances of a confrontation with the European Union and potentially a snap parliamentary election.

Mr Boris Johnson, the bookmakers' favourite to get Mrs May's job in July, has said Britain should leave the EU on Oct 31 - with or without a deal.

"We need to get the spectre of a no-deal exit off the table," Finance Minister Philip Hammond told the BBC yesterday. "Leaving with no deal would be a very bad outcome for the economy."

Underlining his point, Mr Hammond indicated he could be prepared to vote to collapse his party's government if he felt it was heading in the wrong direction.

"I'm not sure that people necessarily have understood what a risk we would be taking, not only with our economy but also with the future of our precious Britain if we left with no deal," he said.

HIGH STAKES

I'm not sure that people necessarily have understood what a risk we would be taking, not only with our economy but also with the future of our precious Britain if we left with no deal.

FINANCE MINISTER PHILIP HAMMOND, on the consequences of leaving without a deal.

 
 

Britain was supposed to have left the EU on March 29 but its politicians are still arguing over how, when or even whether the country will leave the club it joined in 1973.

That political failure caused car production to collapse last month as factories shut down in expectation of a Brexit that never came, data published yesterday showed.

No deal means there would be no transition so the exit would be abrupt. Bank of England governor Mark Carney has said leaving the EU with no transition could be akin to the 1970s oil shock.

Mrs May's government has repeatedly warned of the disruption a no-deal Brexit would unleash on everything from pet tourism to the import of crucial medicines and supply chains that criss-cross Europe and beyond.

Brexit supporters admit there may be some short-term disruption but that in the long term Britain would thrive outside what they cast as an undemocratic and excessively bureaucratic project dominated by Germany.

Eleven Conservative Party lawmakers have declared they are running for Mrs May's job.

When asked if he could be a candidate to succeed Mrs May, Mr Hammond admitted his Brexit views had made him unpopular with some sections of the party, but did not rule out entering the contest to argue his case.

"I hope this contest does not degenerate into a competition to see who can make the biggest spending or tax-cutting pledges," he said. "The Conservative Party has a very strong reputation, well-deserved, for being fiscally responsible."

Mrs May's successor will be bound by most of the constraints that saw her fail three times to get parliamentary backing for an exit deal, leaving open the option of a national election or a second referendum to resolve the country's future. In the 2016 referendum, Britain chose to leave the EU by 52 per cent to 48 per cent.

Meanwhile, the leader of the main opposition Labour Party warned yesterday there is a danger of a no-deal Brexit and that his party will do everything it can to stop that from happening.

"I think there is a real danger of that with the Prime Minister's announced resignation and departure from office and the agenda of most of the candidates for the (Conservative) party leadership," said Labour leader Jeremy Corbyn.

"We will do absolutely everything we can in Parliament to prevent a no-deal exit from the EU."

Separately, Interior Minister Sajid Javid said yesterday more than 750,000 EU citizens have applied to remain living in Britain after it leaves the bloc.

The issue of what would happen to the more than three million EU nationals living in Britain was one of the first to be tackled in divorce talks with the bloc. Britain has said EU citizens have till at least Dec 31 next year to apply for "settled status" whether or not an exit deal with the EU is approved.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 31, 2019, with the headline 'Britain's finance chief warns next PM against no-deal Brexit'. Print Edition | Subscribe