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13 March 2019

Philip Hammond’s call for a soft Brexit exposes Theresa May’s loss of control

In open defiance of the Prime Minister, the Chancellor called for MPs to forge a cross-party consensus on Brexit.

By Patrick Maguire

The gravest symptom of Theresa May’s lack of authority has always been the frequency with which she has found herself at odds with Philip Hammond, her chancellor, on the questions which governments should only ever answer in one voice. 

Unlike their immediate predecessors, David Cameron and George Osborne, Hammond and May are neither personally nor politically close: the former is an unreconstructed fiscal hawk, while the latter has flirted with statist intervention. Their messaging on fundamental economic issues, like austerity and how and when it might be mitigated, is more often discordant than not. 

There is none of the unity of purpose between Downing Street and the Treasury that essentially made Cameron’s six years in office a joint premiership. It has hindered May’s attempts to construct a coherent domestic project but could also fatally undermine what little ability she has left to dictate the course of the Brexit endgame, as Hammond demonstrated in his Spring Statement this afternoon. 

Urging MPs to forge a consensus on an exit deal, Hammond said:

Last night’s events mean we are not where I hoped we would be today. Our economy is fundamentally robust. But the uncertainty that I hoped we would lift last night, still hangs over us. We cannot allow that to continue.

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It is damaging our economy and it is damaging our standing and reputation in the world.

Tonight, we have a choice: we can remove the threat of an imminent no-deal exit hanging over our economy.

Tomorrow, we will have the opportunity to start to map out a way forward towards building a consensus across this house for a deal we can, collectively support, to exit the EU in an orderly way.

It is about as explicit a signal as Hammond could have given, within the constraints of what now passes for collective responsibility, that he believes there is no chance of building a majority for Theresa May’s deal out of Conservative and DUP votes. He would instead prefer to see the government build a cross-party consensus for a softer, Norway-style outcome. 

The Chancellor has been discussing such a course of action at regular private breakfast meetings with sympathisers in Cabinet – namely Amber Rudd, Greg Clark and David Gauke – since late last year. He is now empowered to say so publicly, in open defiance of a prime minister who still believes her deal is the only viable option. For May, this is the overwhelming risk in the coming days: in ceding ownership of the next steps in the process to parliament, she is at the mercy of events and vulnerable to ministerial mutiny.