Brexit latest: New cabinet split opens over 'credible' option of People's Vote

Matt Hancock distanced himself from Philip Hammond's remarks
AP
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A cabinet split opened up today after Chancellor Philip Hammond declared that a second referendum on Brexit is now a “credible” option.

Health Secretary Matt Hancock distanced himself from the Treasury chief’s comment by saying: “Well, that’s certainly not how I would describe it.”

The clash came as teams working for Theresa May and Jeremy Corbyn started a second day of negotiations aimed at ending the deadlock in Parliament. Neither side was firmly ruling out a so-called People’s Vote.

In other key developments today:

  • Ministers said publicly that a no-deal Brexit is off the table after a Bill to delay Britain’s exit rather than crash out of the EU passed in the Commons by one vote. Peers were attempting to derail the Bill in the House of Lords with amendments this morning.

  • A senior DUP MP, Sir Jeffrey Donaldson, suggested his party could agree to a customs union provided it was a “temporary staging post” towards a long-term Brexit deal. However, there were disagreements over whether this approach would be lawful.

  • Labour divisions intensified over a second referendum, with party chairman Ian Lavery reportedly saying the party would be “finished” if it adopted the idea, while shadow attorney general Baroness Chakrabarti said it looked “very likely”.

Philip Hammond declared that a second referendum on Brexit is now a “credible” option
AFP/Getty Images

Mr Hammond told ITV’s Peston programme: “Many people will disagree with it [a second referendum], I’m not sure there is a majority in Parliament for it, but it’s a perfectly credible proposition and it deserves to be tested in Parliament,” he said.

The Chancellor also alarmed Brexit-backers by warning that the UK faces a potentially lengthy delay to leaving, and that the Tories may have to compromise and back a customs union.

Interviewed on BBC Radio 4’s Today programme this morning, Mr Hancock said a second referendum would be “divisive” rather than decisive, and said: “I don’t see how that helps. That isn’t about delivering Brexit ... it doesn’t help us leave the European Union before the European elections, so I am very, very strongly against it.”

Theresa May and Jeremy Corbyn started a second day of negotiations
Hannah McKay/Reuters

Mr Hancock made clear that while he opposed a customs union, the over-riding goal was to leave the EU.

“I would much prefer the Prime Minister’s deal to a customs union, to be frank,” Mr Hancock he said. “I want to deliver Brexit. I have spoken about the problems of a customs union and I don’t think it’s as good for the country. But I also want to deliver Brexit.”

Work and Pensions Secretary Amber Rudd told ITV’s Peston in December: “I don’t want a people’s vote, or a referendum in general, but if Parliament absolutely failed to reach a consensus I could see there would be a plausible argument for it.”

Brexit minister Robin Walker criticised the so-called People’s Vote idea, saying: “It would create further division, and further uncertainty — we don’t think it’s the right way forward.”

The hint of a DUP compromise on the customs union was seen as significant because Mrs May is under pressure to give ground to Labour on the issue.

Sir Jeffrey told BBC Newsline: “We would have preferred a form of Brexit that enables the UK to negotiate new trade agreements with other countries.

“That’s part of the reason for Brexit and maybe a customs union might be a temporary staging post towards that objective.”

Attorney General Geoffrey Cox said he believed MPs could vote to stay in the customs bloc but then leave at a later date.

He told the BBC: “Whether we sign a customs union or whether we don’t, no nation is obliged to remain in an arrangement that doesn’t suit it. If we decided in some considerable years time that we wanted to review our membership of any such customs union — if we signed it — and I’m not saying we will, that’s a matter for negotiation and discussion. There’s nothing to stop us removing ourselves from that arrangement. So we can’t look at these things as permanent straitjackets upon this country.”

But Brexit-backer Sir Bill Cash said Mr Cox was wrong. “I do not agree with his analysis that we can somehow get out of it later,” he said.

Labour MP Anna Turley, a supporter of the People’s Vote campaign, said Mr Cox’s claim that Britain could completely change its mind meant nobody knew what they were getting into.

“It is the definition of blindfold Brexit and will confirm what [Michael] Gove has hinted at previously — that there are some in the Cabinet who want to get any sort of deal over the line by any means possible and then rip up any political declaration so they can start again under a new, hardline PM,” she said.

Meanwhile, a former Conservative MP has criticised Mrs May’s head of communications. Nick Boles, who dramatically quit the party after series of votes on Brexit earlier this week, accused Robbie Gibb of being “a hard Brexiter who wants to destroy the PM’s new search for a cross-party compromise”.

A report has found Brexit has cost the British economy £550 million a week since the referendum as business investment dries up amid political paralysis in Westminster.

Standard & Poor’s suggested that since the June 2016 vote, 3 per cent has been shaved off GDP.

That equates to “forgone economic activity” of £6.6 billion in each of the 10 quarters since the referendum, or £66 billion, the credit ratings agency said.

“The most visible effect has been the depreciation of the British pound, which triggered an increase in inflation. The ultimate result was to erode household spending power.

“Household spending would have been considerably stronger, in line with GDP, had the referendum not occurred,” S&P said in its publication, Countdown To Brexit: What Might Have Been For The UK Economy.

It added that external trade did not see any significant boost from the pound’s collapse, contrary to claims from leading Brexit proponents that exports would be boosted.

S&P senior economist Boris Glass said: “Uncertainty over the shape and form Brexit will take has increasingly paralysed any forward-looking decision making. This is reflected in particular in a contraction of business investment in 2018.”

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