FILE PHOTO: Britain's Chancellor of the Exchequer (finance minister) Philip Hammond is seen outside Downing Street in London, February 13, 2019. REUTERS/Hannah McKay/File Photo
Philip Hammond, the UK's chancellor, has warned MPs to 'think very, very hard' about the implications of rebelling against the leadership in a vote likely to take place on Tuesday © Reuters

Philip Hammond, the UK’s chancellor of the exchequer, has warned Conservative Eurosceptics that if they reject Theresa May’s deal to leave the EU they could end up with a softer form of Brexit.

Mr Hammond, speaking on the BBC’s Today programme on Thursday, warned MPs to “think very, very hard” about the implications of rebelling against the leadership in a vote likely to take place on Tuesday.

Julian Smith, the Tory chief whip, told the cabinet this week that there was a very real prospect — if next Tuesday’s vote fails — that the House of Commons would seize control of the departure process and force Britain into a softer arrangement.

That speculation increased on Wednesday after Labour leader Jeremy Corbyn held talks in his Commons office with leading Tory and Labour MPs from the “Common Market 2.0” group pushing for a Norway-style deal that would mean Britain staying in the single market.

The plan — which would enrage many Brexiters — would see the UK joining the European Free Trade Association at the end of the two-year transition period, while also joining a customs union with the EU.

Mr Hammond said the Commons could take “various different routes” to try to break the political impasse.

“You’re not raising an issue that isn’t widely known and understood. The Labour party has been talking for some time about a customs union grafted on to the prime minister’s deal,” the chancellor said.

“Those of my colleagues who feel very strongly about that proposal need to think very, very hard about the implications of voting against the prime minister’s deal next Tuesday. We will be in unknown territory where a consensus has to be found across the House of Commons and compromises would have to be made.”

Fears are growing within Downing Street that the British government will fail to secure compromises from Brussels in the next few days that will satisfy hardline Tory Eurosceptic MPs.

Speaking in the House of Commons on Thursday, attorney-general Geoffrey Cox, who has been leading the most recent talks with the EU, hit back at the suggestion he failed to present the EU with clear proposals to resolve the backstop, the contentious measure in the withdrawal agreement to guarantee against a hard border with Ireland.

Many Eurosceptics loathe the provision, which they say could trap the UK in a customs union with Brussels indefinitely.

“We have been engaging in focused, detailed and careful discussions with the Union and we continue to seek legally binding changes to the backstop which ensure that it cannot be indefinite,” Mr Cox told MPs. “These discussions will be resumed shortly.”

But if a breakthrough in the talks remains elusive, the government could face another Westminster defeat on the withdrawal agreement. That would follow MPs’ historic rejection in January of Theresa May’s original deal — the biggest Commons defeat in history.

Mr Hammond admitted the situation was a “challenge” but said negotiations were continuing.

“I would have liked to have had it done earlier but these things tend to go to the wire,” he said. “I have great confidence in the Brexit secretary and the attorney-general in the work they are doing.”

If the Brexit deal is rejected again on Tuesday, MPs will be able to vote on Wednesday and Thursday respectively on blocking a no-deal exit and asking the EU for a delay of several months to the UK’s departure.

Mr Hammond said he did not know the whipping arrangements for the no-deal vote, but said: “We always said it would be a very bad outcome for the UK to leave the EU without a deal but there isn’t a motion yet.”

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