LONDON — Chancellor Philip Hammond is set to deliver a heavy blow to Prime Minister Theresa May’s push for a “hard Brexit” — Britain leaving the European Union without access to the Single Market in lieu of full control over immigration.
In a Mansion House speech to be delivered later on Thursday, Hammond is expected to highlight the dangers of a “hard Brexit” and call on May to secure a significant transition period for when Britain leaves the EU on March 29, 2019 — so businesses can adapt to the new environment and avoid sinking the UK’s economy.
He will repeat previous comments that Britain did not vote for a Brexit “to become poorer or less secure.”
Hammond, who has long-warned that a “hard Brexit” will affect the City, does have a point.
The loss of passporting rights following Brexit is a huge fear in the City of London. If these are taken away post-Brexit, then London could cease to be the most important financial centre in Europe, costing the UK thousands of jobs and billions in revenues.
Hammond’s comments will be the latest in a line of politicians to urge May to either cancel Brexit by reversing Article 50 or opt for a “soft Brexit.”
There is a huge push for a “soft Brexit” right now
May triggered Article 50 in March, which started the official two-year window during which Britain must negotiate its deal to leave the EU. Britain will leave the EU on March 29, 2019 — unless she calls to reverse it and the 27 other EU member states vote unanimously to allow her to do so.
May called for a snap election in April; she was hoping to gain a bigger majority for her Conservative Party in Parliament so she could push through her Brexit plan. The greater the majority, the easier it is to push through legislation.
But the Conservatives failed to win 326 seats in the general election — denying them even an outright majority. The party still won a plurality of seats (318) and votes (12,667,213, or 42.8%).
But the problem now is that while May is trying to form a minority government through a deal with Northern Ireland’s Democratic Unionist Party, she will still need to persuade most of her party to vote for what she pushes through.
But key members of the party want a soft Brexit. That would seek to preserve access to the single market and freedom of travel but sacrifice the UK’s negotiating power post-Brexit.
On Wednesday, her predecessor, former Prime Minister David Cameron said that May should adopt a “softer” Brexit, and urged her to talk to the main opposition party, Labour, about coming to an agreement over the type of Brexit deal Britain should pursue.
“It’s going to be difficult, there’s no doubt about that, but perhaps an opportunity to consult more widely with the other parties on how best we can achieve it,” he said. “I think there will be pressure for a softer Brexit. Over Brexit, she is going to have to talk more widely, listen to other parties.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.