Chancellor of the Exchequer Philip Hammond caused controversy this week when he said that no money would be invested in preparation for a ‘no deal’ situation following negotiations to leave the EU. The remarks seemingly contradicted what Prime Minister Theresa May then went on to say in parliament, leading to questions as to the health of their relationship in a week that has seen a number of reports of internal coups an infighting, often featuring the name of Foreign Secretary Boris Johnson.

Mr Hammond, nicknamed ‘spreadsheet Phil’ by the British media due to his grey image and a perceived lack of charisma, made the uncharacteristically controversial comments during a lengthy meeting of the Treasury Select Committee.

Our of character

“What I am not proposing to do is allocate funds to departments in advance of the need to spend. Every pound we spend on contingent preparations for a hard customs border is a pound we can’t spend on the NHS, social care, education or deficit reduction,” he told MPs in what is being interpreted by several Brexiteers within the Conservative party as an act of clear defiance of Theresa May.

The most vehement criticism of the chancellor was made by Lord Lawson, who accused Mr Hammond of behaviour “close to sabotage”. Meanwhile, Eurosceptic backbenchers labelled him a “prophet of doom”, calling on the prime minister to sack him from the treasury in the expected cabinet reshuffle. Number 10’s lukewarm reaction to Philip Hammond’s comments speaks volumes.

Internal rift

Until now, the irreconcilable rift between senior members of the Conservative government on the topic of Britain’s exit from the EU had more or less been hushed up, perhaps out of a fear of Jeremy Corbyn’s Labour surge. The potency of ideological difference is difficult to smother now that Phillip Hammond and Theresa May apparently hold directly opposing views on economic policy in preparing for a ‘no-deal’ situation.

EU flag Big Ben
Tensions between Westminster and Brussels have been ever-present in the past year. Photo credit: Wikipedia Commons.

Shortly after the chancellor’s comments, the Prime Minister stated that, “While I believe it is profoundly in all of our interests for the negotiations to succeed, it is also our responsibility as a government to prepare for every eventuality.” If Mr Hammond refuses to put the money aside in preparation for an ugly Brexit, it’s difficult to foresee a harmonious outcome.

Hammond for PM?

Philip Hammond is often seen as the voice of reason in the government. The Financial TimesChris Giles commended the chancellor’s move while The Economist coined him “the designated adult among children” back in June. So the question inevitably arises: does Philip Hammond want the top job, and is he equipped to take it on?

His motive is uncertain. Several consider his remarks this week to have been a defensive move to assure his position in an imminent cabinet reshuffle. Theresa May would struggle to sack both Hammond and under-fire Foreign Secretary Boris Johnson.

By offering a pragmatic voice throughout what many regard as a chaotic post-election government, Hammond is slowly and steadily building political capital as the voice of soft-Brexit. A tweet that he posted following his reappointment as chancellor after the election encapsulated his opinion towards Brexit:

It is ‘spreadsheet Phil’s’ emphasis on negotiation in the face of a party half-fixated on a hard Brexit or a ‘Brexit-at-any-cost’ that may well end up doing him future favours. Voices on all sides, from a wide-range of parties argue that a ‘no-deal’ situation would be “unimaginable”. According to John Bruton, the former Irish Prime Minister, it would lead to a potential recession and would be “devastating for the peace process” in Ireland.

If the Brexit negotiations fail to escape the current ‘deadlock’, despite the ‘new momentum’ in talks according to comments made by the EU’s chief negotiator Michel Barnier, then Theresa May and the strong Eurosceptic members of the government who are leading the negotiations will surely be put under increasing pressure to make progress. It’s very hard to definitively say that Philip Hammond is a prime minister in waiting.

Does Philip Hammond plan to move one door down? Photo credit: Wikipedia Commons.

What is clear is that Theresa May’s weakness at home is hindering progress in Europe due to an internal instability within both the government and wider Conservative party. The lack of definition on the approach to Brexit, specifically in terms of where the government lies on the hard/soft spectrum has led to both sides beginning to become less reserved with their ideological differences.

Philip Hammond’s remarks this week are symptomatic of an overarching lack of confidence in the team at the top to demonstrate a sincere collective confidence on resolving issues with Europe. With the March 2019 deadline ever-closer, Hammond increasingly appears to be the voice of reason in a “coalition of chaos” as concrete terms fail to be agreed with Brussels.

If Hammond is forced out, he will likely do so with his dignity and political capital intact, while May would be unlikely to recover her own. If the Brexit negotiators were to continue to find trouble, it’s not hard to imagine the pragmatic Hammond waiting in the wings to pick up the pieces for the Conservative party. For the UK, it might well be too late.

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