Negotiating trade deals 'ought to be simpler' after Brexit, says Chancellor Philip Hammond

He says the chances of Britain successfully leaving the EU are being undermined by those seeking to tie the PM down to a specific outcome too early

Samuel Osborne
Wednesday 19 October 2016 15:04 BST
Philip Hammond answers questions in front of the Treasury Select Committee at the House of Commons, London on the subject of the work of the Chancellor of the Exchequer
Philip Hammond answers questions in front of the Treasury Select Committee at the House of Commons, London on the subject of the work of the Chancellor of the Exchequer (PA)

Conducting trade deals with other countries should become a much faster process once the UK leaves the EU, the Chancellor has claimed.

However, Philip Hammond refused to say whether the country wanted to remain in the customs union, amid reports Cabinet members have been warned that leaving the arrangement could risk a 4.5 per cent fall in GDP by 2030.

Mr Hammond declined to confirm that preliminary discussions about future trade agreements with other countries meant Britain was committed to leaving the customs union.

He went on to say the chances of Britain successfully leaving the EU were being undermined by those seeking to tie Prime Minister Theresa May down to a specific preferred outcome too early.

"The best way to support this Brexit process and make sure we get the right Brexit for Britain is to give the Prime Minister the maximum space at the negotiating table, within the two clear constraints that we are leaving the EU - irreversible decision - and we are going to control migration between the EU and UK," Mr Hammond told Treasury Select Committee.

"But beyond that, she needs the maximum possible space. My objective in supporting her is to ensure that she has the broadest range of options - properly costed and understood - and the maximum scope to deploy that broad range of options in what might be a wide-ranging negotiation.

"I would say that those that are undermining the effort are those that are seeking to close down that negotiating stance, seeking to arrive at hard decisions that we don't need at this stage.

"Keeping as many areas open, as many options open, as possible is the key to the strongest possible negotiating hand."

Mr Hammond was challenged by chairman of the committee, Andrew Tyrie, who pointed out that trade policy within the customs union was negotiated collectively, raising questions about the purpose of Liam Fox's International Trade Department unless it had already been decided to leave the arrangement.

Mr Hammond said "many EU countries have trade ministries even though they are inside the customs union", and ministers in Dr Fox's department were "promoting British trade" on overseas visits.

However, he acknowledged that "in some cases they will be exploring the appetite of their interlocutors for potential future trade deals with the UK".

"But we are very clear that we are not able to enter into negotiations with third parties at the present time because of the constraints of our membership of the EU - certainly until such time as the Article 50 has been served, it would not be appropriate to enter into any substantive negotiation with any third party."

Mr Hammond also indicated he believes the UK may have to beef up customs operations at its borders significantly if it left the European customs union.

Asked whether reports that an additional 5,000 customs officers would be needed were correct, Mr Hammond told the committee: "It would be our choice, of course, but assuming that we wanted to operate an efficient at-the-border customs system under World Trade Organisation rules, we may need significantly more infrastructure at the border than we have now."

Additional reporting by PA

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