Number 10 slaps down Philip Hammond after he pledges to pay divorce bill even without Brexit deal

Posted On: 
6th December 2017

A fresh Cabinet split has erupted after Philip Hammond vowed that Britain will pay a £50 billion Brexit divorce bill even if it leaves the EU without a trade deal.

Relations between the Prime Minister and her Chancellor are strained.
Credit: 
PA Images

The Chancellor told MPs it was “inconceivable” the UK could duck out on pre-agreed spending and pension commitments.

But within an hour, a spokesman for the Prime Minister slapped him down and said: "Nothing is agreed until everything is agreed, and that applies to the financial settlement."

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Giving evidence to the Treasury Select Committee, Mr Hammond said: "It would not be credible to suggest a country like the UK would walk away from an amount of money it has an obligation to meet.

"I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation."

He added: “That’s not the kind of country we are and frankly it would not make us a credible partner in future international agreements.”

His comments also put him at odds with Boris Johnson and Michael Gove, who only signed up to the size of the bill on the condition that the UK would get a trade deal in return.

Liz Truss, the Chief Secretary to the Treasury, also told MPs last week that an agreement on the divorce bill was "contingent" on a trade deal being struck.

Mr Hammond also revealed that the Cabinet is yet to discuss its vision for the Brexit “end state” – despite some 18 months passing since the referendum vote.

He said such a talk would happen once trade negotiations begin and would initially be undertaken by the Cabinet sub-committee on Brexit.

“We are not yet at that stage and it would have been premature to have that discussion until we reach that stage,” he argued.

Committee member and Labour MP Alison McGovern said it was "beyond parody" that the Cabinet had not discussed the Brexit end state.

"The government is flailing around trying to get agreement to move on to talks on the future UK-EU relationship," she said in a statement on behalf of pro-EU group Open Britain.

"Yet they don’t even know what they want that relationship to be once they make that progress. They are breathtakingly dysfunctional."

Green leader Caroline Lucas meanwhile accused the Government of making its Brexit approach "up on the fly". She added: "The Cabinet is frankly an embarrassment."

The Prime Minister's spokesman said a discussion on the end state relationship would take place before the end of the year.