UK government still undecided on final Brexit aims: Hammond

Britain's Chancellor of the Exchequer Philip Hammond leaves Downing Street, London
Britain's Chancellor of the Exchequer Philip Hammond leaves Downing Street, London, December 6, 2017. REUTERS/Toby Melville

December 6, 2017

By David Milliken and Andy Bruce

LONDON (Reuters) – Britain’s government has not yet decided what it wants from a final Brexit deal because it is still waiting to clear preliminary talks with Brussels, finance minister Philip Hammond said on Wednesday.

With the clock ticking towards Britain’s scheduled March 2019 exit from the European union, the government is focused at the moment on getting a green light for the negotiations on future trade relations with the EU, Hammond said.

“The cabinet has had general discussions about our Brexit negotiations but we haven’t had a specific mandating of an end-state position,” he told lawmakers in Britain’s parliament.

Prime Minister Theresa May’s top ministers have big differences over what Brexit should mean for Britain, and over the extent of concessions that the country should offer in return for preferential access to the EU’s single market.

Hammond said a group of key government ministers would deal with the issue once Britain is given the go-ahead by other EU countries that it can proceed with negotiations for a new, post-Brexit trade deal.

That go-ahead is on hold pending an agreement by the bloc’s other 27 member states that Britain has done enough on the terms of its divorce, now stuck on differences over how open the future border between Ireland and Northern Ireland should be.

“We are not yet at that stage and it would have been premature to have that discussion until we reach that stage,” Hammond told parliament’s Treasury Committee.

A spokesman for May, asked about Hammond’s comments, told reporters that government ministers would discuss the preferred outcome of the Brexit talks before the end of the year.

“We’re not into phase two (of negotiations) yet, and Brussels have been clear that they’re not prepared to discuss ‘end state’,” the spokesman said.

Earlier on Wednesday Brexit minister David Davis inflamed critics of the government’s handling of Brexit when he said he had not conducted formal sector-by-sector analyses of the effect of Brexit on the economy, arguing they were not yet necessary.

Hammond has previously said he favors striking a “pragmatic” deal with the EU to minimize Brexit’s impact on businesses and the economy, angering some Brexit supporters who favor a more definitive rupture with Brussels.

On Wednesday, Hammond reiterated that Britain would leave the EU’s single market and its customs union but that need not represent a big change to Britain’s relationship with the bloc, if Britain replicates most of the current arrangements.

“Now, that would have consequences and some of our colleagues would not find that palatable, but it would be logically possible to approach it in that way,” he said.

May hopes to secure the launch of the second phase of the Brexit negotiations when she meets other EU leaders next week. But she suffered a setback this week when her allies in a political party from Northern Ireland objected to proposals for post-Brexit rules for the border with Ireland.

The Democratic Unionist Party said on Wednesday the stand-off increased the likelihood of a “no deal” Brexit – the nightmare scenario for many British businesses.

(Additional reporting by William James, writing by William Schomberg; Editing by Mark Heinrich)