LONDON (REUTERS) – Finance minister Philip Hammond said measures to reduce net migration into Britain should be designed in such a way as to protect the economy as the country plans its strategy for exiting the European Union.
Newspapers have reported sharp disagreements between members of Prime Minister Theresa May’s cabinet with Hammond as an antagonist to those pushing for a so-called ‘hard Brexit’ in which immigration control is prioritised over economic concerns.
“As we approach the challenge of getting net migration figures down to the tens of thousands it is, in my view, essential that we look at how we do this in a way that protects our economy and protects the vital interests of our economy,”Hammond told a parliamentary committee on Wednesday.
Earlier this week, the prime minister’s spokeswoman said May has full confidence in Hammond – who campaigned to keep Britain in the EU – and wants to hear different views on how to make a success of leaving the EU.
Treasury sources have denied reports that Hammond was seeking to obstruct the exit process and that he was on the brink of resigning his post.
The June 23 vote took many investors and business leaders by surprise, triggering the deepest political and financial turmoil in Britain since World War Two and the biggest ever one-day fall in sterling against the dollar.
Nearly four months after the vote, sterling is 17 per cent below its pre-referendum levels. Its latest falls were triggered by concerns that May favoured a hard Brexit which most economists believe would damage the economy.
There have also been signs of friction between the government and the Bank of England since the referendum.
Bank of England Governor Mark Carney on Friday hit back at criticism from May of the central bank’s low interest rates, saying that he would not “take instruction” from politicians on how to do his job.
Asked about May’s comments and the government’s approach to monetary policy, Hammond said nothing had changed: “Monetary policy is independently determined. That will continue to be the case.” “My understanding is that what the prime minister was trying to say is that we recognise that monetary policy, which is an important tool of macroeconomic policy, has a distributional impact,” he said.
“To the extent that the government believes that distributional impact needs to be addressed or corrected we also have tools available to do that.”