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Chancellor admits to 'unprecedented uncertainty' after Brexit vote

Brexit is causing an unprecedented level of uncertainty which is leading to forecasts of an economic slowdown, Chancellor Philip Hammond has said.

Mr Hammond said "there's no point crying over that fact" and stressed it was the reality of pulling Britain out of the European Union (EU).

The Chancellor also admitted the Government would have no clarity on what the UK's future trading arrangements will be when it triggers Article 50 of the EU treaties to begin the Brexit process.

Mr Hammond, widely seen as one of the most cautious ministers in the Cabinet over Brexit, also suggested some aspects of the new trading arrangements could take longer to negotiate than the two-year Article 50 exit process.

That could create a need for transitional rules to be put in place for when the UK actually leaves - expected in spring 2019 with Theresa May committed to invoking Article 50 by April.

Mr Hammond told ITV's Peston On Sunday: " Of course, business likes certainty and that's one of the challenges we face over the coming couple of years - we're going to have an unprecedented level of uncertainty and that's one of the factors causing many commentators to predict that there will be a slowing of economic growth.

"At the moment we haven't served the Article 50 notice and we're not in any substantive negotiations with our European partners, so I think it's unlikely that we will have clarity on any of these issues by the end of March.

"It creates a degree of uncertainty but that's a reality, we now have a situation where business will face uncertainty for the next couple of years as these negotiations go on.

"So, there's no point crying over that fact, we just have to plan to accommodate it."

The Chancellor also criticised the 60 Conservative MPs, including former cabinet ministers, who have called on the Prime Minister to commit to what many will see as a so-called "hard Brexit".

Cameron-era ministers Michael Gove, Iain Duncan Smith, John Whittingdale and Theresa Villiers urged the PM to pull Britain out of the European single market and the customs union.

Mr Hammond told Peston: "We don't think the best way to approach this is to assume there are fixed existing structures - the single market, the customs union, and all you have is a binary choice in relation to those.

"Britain's is a very large economy, we have a very large amount of trade with the European Union, and the sensible way for us to approach this is to negotiate a bespoke arrangement that works for Britain and works for our European partners."

The Open Britain campaign claimed leaving the customs union would cost British businesses £12.7 billion a year because complex so-called "rules of origin" around tariffs would add 10% to the cost of goods they export.

Citing a Centre for Economic and Policy Research study commissioned by the Government, Remain-backing Tory MP Anna Soubry said: "Brexit is supposed to herald a bonfire of bureaucracy but leaving the customs union would leave British firms mired in expensive additional red tape.

"The Government's own figures suggest a multibillion-pound bombshell for British businesses.

"Before slapping them with that kind of bill, we need concrete evidence that leaving the customs union will make Britain better off."

Tory former minister Sir Oliver Letwin, who chaired the Government's Brexit unit immediately after the referendum, claimed Britain would have to continue paying into the EU budget to give City banks the right to continue trading freely in Europe.

He told BBC Radio Five Live's Pienaar's Politics: "The fact is in the end, in the real world as opposed to the world of campaigns and tabloids, the truth is you have got to make some tough choices and you can't have everything.

"The question is which things matter most? Clearly, control of migration is an absolute, clearly the ability to have free trade agreements with the rest of the world is an absolute, clearly the fact we are going to be outside, and I think this is really the absolute, outside the grip of the Court of Justice of the EU is an absolute.

"So, there is therefore relatively little left to trade which isn't an absolute but we desperately need; which is the ability to have the City of London prosper and if we have to pay for that a bit, we have to pay for it."


From Belfast Telegraph