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Hammond: Brexit supporters have 'no credible alternative' to being inside EU

Published 02/03/2016

The Government is stepping up its warnings over the dangers of leaving the EU
The Government is stepping up its warnings over the dangers of leaving the EU

Campaigners for the UK to leave the European Union have put forward no "credible alternative" to membership, Philip Hammond said as he warned that Brexit could cost jobs and push up prices.

The Government has produced analysis by officials concluding that any of the alternative arrangements for relations with Europe would leave Britain worse off.

Prime Minister David Cameron said the analysis shows that the alternatives to EU membership would "damage Britain" - but the document was dismissed as a "dodgy dossier" by pro-Brexit Cabinet minister Iain Duncan Smith.

Foreign Secretary Mr Hammond said he was "not surprised" by his Cabinet colleague's comment and added: "The Government is mandated by Parliament to publish a series of documents and I probably could have guessed in advance what my colleague would describe them as."

The paper - which looks at arrangements adopted by countries including Norway, Switzerland and Canada as well as the option of falling back on World Trade Organisation (WTO) rules - warns that none is as good as the deal on offer with Brussels.

Mr Hammond warned that the alternatives would mean "working people would pay the price with few jobs and rising prices".

Speaking at the Chatham House foreign affairs think tank in London, Mr Hammond said: "The fact is, none of the bilateral free trade models would offer anything like the access that we now have to the single market and many of them would require adoption of EU regulations and freedom of movement rules."

He added that as well as the terms of trade with Europe, the UK would also face renegotiating deals on a global scale if it voted to leave on June 23.

"We currently benefit from EU trade deals with over 50 different countries. These deals have been based on the negotiating muscle of a bloc with 500 million consumers and a quarter of the world's GDP.

"Renegotiating them as a single country would take many, many years - years in which British businesses would be squeezed out of traditional markets, and with no guarantee at the end of the process that we could get terms as good as we have now.

"Some have said we should focus our attention on deals with the Anglosphere and the Commonwealth, but the EU already has or is negotiating trade deals with all the biggest Commonwealth countries and none of our allies wants us to leave the EU - not Australia, not New Zealand, not Canada, not the United States.

"In fact the only country that would like us to leave the EU is Russia and that should probably tell us all we need to know."

Mr Hammond conceded it was possible that the UK would be able to negotiate a better deal with the EU than other countries had managed but warned that the other 27 countries would "aggressively" protect their own interests and the process could take many years - or in Switzlerland's case two decades and more than 100 separate agreements.

It would mean "years of uncertainty for Britain just as we are getting back on our feet".

Work and Pensions Secretary Mr Duncan Smith said the "real uncertainty" lay with the EU "project".

"As each day passes we see yet another example - from the utter failure to cope with the migrant crisis, to the increasing disaster of the euro," he said.

"This dodgy dossier won't fool anyone, and is proof that Remain are in denial about the risks of remaining in a crisis-ridden EU.

"The truth is we won't copy any other country's deal. We will have a settlement on our own terms - and one that will return control of our borders, and money to Britain. That's the safer choice."

Mr Hammond claimed some Leave campaigners were prepared to "sacrifice" British jobs in order to cut ties with Brussels.

Challenged about the splits in the Conservative party which have seen five Cabinet ministers and two former leaders back a Brexit, Mr Hammond said the Leave campaigners "have to be honest and open about their priorities".

"I know people, there are people out there - they won't say this publicly - but privately they are prepared to sacrifice jobs and growth in order to be able to get the clampdown on migration from the EU, in order to stop paying into the EU.

"We need to be honest with the British people about this. My judgment is if the British people have the facts they will make up their own minds.

"But it isn't honest to pretend to the British people, as some have been doing, that we will be able to carry on as if we were still members of the EU with full access to the European markets, nothing will change, our businesses can go on selling and jobs will be safe yet we won't have to accept freedom of movement, we won't have to accept irksome EU regulations and we won't have to contribute to the budget.

"That is not going to happen, it is not a realistic scenario and the Leave campaign needs to be honest about that."

The latest official paper examines the arrangements which other countries outside the EU have adopted and finds none offers the advantages of continued membership.

"The UK Government believes that no existing model outside the EU comes close to providing the same balance of advantages and influence that we get from the UK's current status inside the EU," the report said.

A senior Downing Street source said: "The onus really now is on the Leave campaigners to give some honest answers to very reasonable questions.

"What will Leave look like? We've got a whole plethora of potential proposals coming forward. I see today one of the main Leave campaigns seems to be saying we need to remove ourselves from the single market altogether.

"It's not clear. Will there be access to the single market for British business? Will British businesses have to pay tariffs on goods? These are the sort of reasonable questions that British people have a right to get some answers to."

Asked how the PM viewed Mr Duncan Smith's description of the report as a "dodgy dossier", the source said: "It's for other people to decide. I think when people actually get a chance to read the document, they will see it's been produced by civil servants from across government and it's a very factual, sober analysis of the alternative options and the downsides that they involve."

Norwegian PM Erna Solberg told the BBC: "For the UK to think that it will get everything it wants from the EU, without giving anything back... well, that just doesn't happen in a political organisation.

"We lack influence in important decision-making processes in the EU. We have special arrangements on some issues, but basically we have lost our sovereignty."

Matthew Elliott, chief executive of Vote Leave, said: "The Government is doing everything it can to falsely engineer a climate of fear about leaving the EU with ludicrous claim after ludicrous claim.

"The stream of taxpayer-funded propaganda is disappointing, disingenuous and unbecoming of the senior politicians sent out to defend it. It is undermining the open and honest debate the public want to have. The safe option is to vote Leave."

He added: "As the Foreign Secretary himself admitted this morning, of course we would be able to negotiate a free trade deal with the EU after we vote Leave."

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