Philip Hammond in Cabinet row over accusations he is trying to 'undermine Brexit'
Philip Hammond is facing accusations of attempting to “undermine Brexit” by pushing for delays to Cabinet measures designed to control immigration.
The Chancellor has been criticised by Cabinet colleagues for “arguing like an accountant seeing the risk of everything” rather than pressing ahead with plans for Brexit.
It is understood that Mr Hammond was one of a number of voices urging caution during a Brexit Cabinet committee meeting last week during which proposals were discussed for a new work permit system designed to reduce immigration.
At the meeting Amber Rudd, the Home Secretary, presented plans for a post-Brexit visa regime that would see all European Union workers forced to prove they have secured a skilled job before being allowed into Britain.
It was seen as confirmation that Britain will leave the single market as part of the Brexit process, something which Mr Hammond is previously understood to have warned against. Sources claimed that Mr Hammond raised questions about the plans.
Government sources rejected any suggestion that there was open dissent from Mr Hammond over the proposals, and said the meeting was about exploring proposals rather than reaching any concrete position over future immigration policy.
However, members of the Cabinet are said to be growing increasingly frustrated by Mr Hammond’s position on Brexit. One Cabinet source said he is “overly influenced by his Treasury officials who think it is a catastrophe that Britain voted to leave the EU”.
Another source said: “He is arguing from a very Treasury point of view. He is arguing like an accountant seeing the risk of everything rather than the opportunity.”
Another source suggested that while the Treasury is quick to criticise solutions proposed by members of the Cabinet, it has been “less forthcoming” in tabling its own policies.
The source added: “The Home Secretary presented an immigration paper at the meeting. Other departments are not quite so proactive. There are difficulties.”
There were claims on Sunday that tensions have increased to the point that there are even fears Mr Hammond could resign as Chancellor.
Treasury sources moved to deny those claims as “complete and utter nonsense”.
One source said: “It is ridiculous to suggest he is doing anything other than trying to make [Brexit] work.” However, the Treasury source added: “He is very clear that the vote to leave the EU was not a vote to sink the economy."
At the Brexit committee meeting last week, Mrs May is understood to have demanded that her Cabinet “get on” with delivering Brexit.
“The Prime Minister made it clear that we have to get on this,” one source familiar with the events said. “But there are very big personalities arguing different things. It’s not easy.”
Under the proposals submitted by Ms Rudd last week, EU tourists and students would still get free access to the UK.
The work permit system would be designed to stop low-skilled migrants coming to live in the UK in order to search for a job
It is believed that the Home Secretary also proposed a “seasonal worker scheme” that could allow low-skilled migrants to come to Britain temporarily if there are shortages of workers in industries such as agriculture or construction.
Any attempt to create a work permit scheme is likely to be criticised by business leaders.
The Government was earlier this month forced to abandon plans to name and shame businesses hiring foreign workers instead of Brits.
Meanwhile, a think-tank has suggested that City firms could move their headquarters out of Britain unless they are given assurances that the finance industry will be protected as part of Britain’s Brexit negotiations.
Open Europe warned that the banking sector needs at least one year’s notice of what access to the EU market will look like when the UK leaves the bloc.
“It is essential for the Government to avoid a cliff-edge situation,” the independent think-tank said.
“The financial services industry needs maximum certainty on future trade arrangements with the EU as early on as possible in the negotiations.
“Firms have been planning for the worst, and some of them may start putting those plans into motion if uncertainty drags on for too long.”