Brexit: Cabinet splits emerge over Philip Hammond’s plan for transitional deal

It comes after Mr Hammond claimed there was a 'broad acceptance' at Cabinet level for many of the current arrangements with the EU remaining 'very similar' for a period lasting three years

A show of unity, but divisions simmer not far below the Cabinet surface (Getty)

Cabinet splits have emerged over the Government’s plan for a post-Brexit deal after a series of briefings appeared attacking the Chancellor’s transition strategy of retaining free movement of labour until 2022.

It comes after Mr Hammond suggested there was a “broad acceptance” at Cabinet level for many of the current arrangements with the EU remaining “very similar” for a period lasting up to three years after Britain formally leaves the bloc in March 2019.

But his plans were criticised by Liam Fox, the International Trade Secretary, who told the Sunday Times the Cabinet has not yet agreed a deal to allow free movement of labour for three years after Brexit, adding that any such move would “not keep faith” with the referendum result.

"If there have been discussions on that I have not been party to them. I have not been involved in any discussions on that,” Dr Fox said.

He continued: “I am very happy to discuss whatever transitional arrangements and whatever implementation agreement we might want, but that has to be an agreement by the Cabinet. It can’t just be made by an individual or any group within the Cabinet.”

“We made it clear that control of our own borders was one of the elements we wanted in the referendum, and unregulated free movement would seem to me not to keep faith with that decision.”

Dr Fox’s comments also appeared as the Chancellor’s plans for a post-Brexit deal were criticised by a close ally of Foreign Secretary Boris Johnson. Gerard Lyons, a former economic adviser to Mr Johnson while he was London Mayor, said a two-year transition agreement with the EU would work better than a three-year one.

He told the Sunday Telegraph: “Many of the ‘risks’ being highlighted about Brexit are perceived risks, not real risks. And a two-year transition would alleviate many concerns.”

Mr Johnson has not yet commented publicly on Mr Hammond's plans, his ally continued: “Enough is enough. The leader is away so those in senior roles seem to think they can play.

“The trouble is, new ideas for Brexit should not be floated in public in the way they currently are, as if government policy is being made by whoever can occupy the news agenda that day. There is a need to return to some Cabinet collective responsibility on this, the most important issue of our day: Brexit.”

And despite Theresa May’s plea to keep discussions between Cabinet ministers confidential, the Mail on Sunday quoted allies of David Davis, the Brexit Secretary, suggesting the Chancellor was attempting to undermine the Prime Minister while she is on holiday in Italy’s Lake Garda.

In an article for the newspaper David Jones, a former Brexit minister, said: “No sooner is the Prime Minister on holiday and Parliament away for the summer, than Europhile forces in the Cabinet decide it’s a good time to go on manoeuvres.

“All this agitation by the Chancellor and his allies is hugely discourteous to Mrs May – and undermines her authority. But just as importantly, talk of a three-year transitional deal – or longer – by Philip Hammond is deeply dangerous.”

But the Chancellor, who is thought to have backing in the Cabinet from the Home Secretary Amber Rudd, and First Secretary Damian Green, received praise from the pro-EU Conservative Nicholas Soames.

"He has restored discipline to the political infant class who want Brexit at any cost,” Mr Soames said. "Instead of mindlessly criticising him, they should thank him for putting a stop to what was in danger of becoming a pub brawl."

On Friday Mr Hammond claimed: “I think there’s a broad consensus that this process has to be completed by the scheduled time of the next general election, which is in June 2022.

“So a period of at the most three years in order to put these new arrangements in place and move us on a steady path without cliff edges from where we are today to the new long term relationship with the European Union.”

He also added that “literally nobody” wants a post-Brexit migration “cliff-edge” as he outlined his plans for a two-phase Brexit during which Britain will retain access to the single market before new permanent arrangements are in force by the next election.