UK's Hammond says economy should be priority in Brexit talks

Violet Tucker
June 19, 2017

The first day of formal Brexit negotiations follows "talks about talks" between Commission officials and British civil servants this week.

The issue most likely to torpedo negotiations is Britain's bill for leaving the bloc.

Besides forging a deal to keep her job and preparing for Brexit talks, May is also grappling with a crisis over the breakdown in power-sharing between the pro-British DUP and the Catholic nationalist Sinn Fein party in Northern Ireland's separate, devolved government.

Scottish Conservative leader Ruth Davidson, who is newly influential after winning 13 seats in Scotland, has said Britain should prioritise "freedom to trade and our economic growth".

Nearly a year after Britain voted to leave its biggest market, the talks come amid signs the United Kingdom is softening its approach to the split and adopting a more conciliatory tone.

In an interview with the BBC's Andrew Marr, the chancellor ruled out continued membership of both the European single market and the customs union. May's strategy was thrown into confusion by last week's election in which she squandered her Conservative Party's parliamentary majority. The queen's speech, which lays out the government's program, has been delayed until Wednesday.

With May still hammering out the details of a post-election deal to stay in power with the support of a small Northern Irish party, there are fears of a disorderly exit that would weaken the West, imperil Britain's $2.5 trillion economy and undermine London's position as the only financial centre to rival NY.

Instead, she said that she wants to negotiate a "bold and ambitious" new trade agreement that replicates as far as possible the existing trade arrangements.

Britain's giant banking industry and other business groups see Hammond as their most powerful ally in government and they were anxious when it appeared he might lose his job in the run-up to the election.

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He said he wanted post-Brexit trade with the European Union that was not just free from tariffs but also delays and bureaucracy.

Hammond's team at HM Treasury - the engine room of the Remain campaign's 'Project Fear' under his predecessor George Osborne - are said to have entered "street-fighting mode" as he canvasses support for such a deal.

European Union leaders, who will meet May at a summit next Thursday, have been irritated by her repeated threats to walk out with "no deal" - even if most see that as a campaigning bluff given the chaos it would cause.

Negotiators are expected to later move onto the key issues of citizens' rights, the financial settlement, and the border between Northern Ireland and the Republic of Ireland.

Normally, Parliament sits for one year, but officials said more time will be needed.

"It is indeed our understanding that the agenda of the first negotiation round consists of issues related to the first phase of negotiations, which means citizens, money, Northern Ireland and some other exit-related questions", one diplomat said.

European Union officials acknowledge that the agreements to be reached before Britain leaves in March 2019 can only be concluded as a whole package simultaneously but leaders have barred Barnier from talking about trade before he gets outline deals on the rights of expatriate citizens and how much Britain owes the EU.

POLITICO revealed on Thursday that the Brexit talks would get underway Monday as planned despite the start date being thrown into doubt by the inconclusive result of the U.K.'s general election.

Other reports by Guamnewswatch

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