Philip Hammond has refused to back down in his fight with eurosceptic Tory MPs and called for a “middle way” to be found on Brexit.
Downing Street said earlier today Theresa May had “full confidence” in the chancellor amid a brewing civil war within the Conservative Party over the government’s plans for leaving the EU.
Furious Tory backbenchers, Downing Street sources and Cabinet ministers all hit out after Hammond suggested on Thursday that Britain and the EU would move only “very modestly” apart after the UK quits the bloc in March 2019.
Speaking to Sky News today, the chancellor risked adding further fuel to the fire by saying he wanted to see the “minimum” changes to the UK’s economic relationship with the EU.
“There are people that want us to stay in the EU customs union, we reject that argument, there are people that want us to sever our trade links with Europe and give up this market, we reject their arguments to, we’ve got to stick to the middle way,” he said.
“The smaller the changes that happen to our access to markets, the frictions at the borders the better,” Hammond added.
Brexit Secretary David Davis, meanwhile, admitted at an event in Teesside there “would be arguments about tactics” between the members of the Government but attempted to show a united front.
He said: “There is no difference between the Chancellor and myself and indeed the Prime Minister in terms of that we both want a Brexit which serves the British economy and serves the British people.
“There will be arguments about the tactics but they will change. The options available to us will change throughout the course of the negotiations.”
Amid growing speculation of a leadership challenge against May, Health Secretary Jeremy Hunt this morning was dispatched to the BBC’s Today programme to deny the prime minister had been “timid”.
Bernard Jenkin, a senior pro-Brexit Tory backbencher, suggested May might now need to fire Hammond.
“If there are big ideological divisions between the chancellor and the prime minister that is usually not very good news for the stability of the government and the pm will need to address that one way or another,” he told BBC Daily Politics.
“The Parliamentary Party as a whole would like to see her impose her authority – let the leopard come bounding out of the cage.”
But in a sign of the growing divisions within the party, former culture minsiter Ed Vaizey hit back almost immediately on the same programme.
“Brexiteers tour the TV studios saying: It’s outrageous. But they won’t tell us what they want,” he said.
David Davis will use a speech today to reject hardline Brexiteer claims that the planned two-year transition period after 2019 will leave the UK a “vassal state”.
The Brexit secretary will insist the ability of the UK to sign new international trade deals after March 2019 is a major victory for the government’s approach.
Jacob Rees-Mogg clashed with Davis earlier this week and warned that Britain would remain the EU’s “lackey″ until the transition period ended.
Bank Governor Mark Carney also risked fresh backbench Tory criticism when he told the BBC that there had been a substantial “short term” hit to the British economy in the wake of the 2016 EU referendum.