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IT appears as though Foreign Secretary Boris Johnson has been caught out telling the truth. That is, as we know from past episodes, a sackable offence in any Tory Cabinet.
He was secretly recorded addressing the Conservative Way Forward group, accusing the Treasury of being at “the heart of Remain.”
Not surprisingly, Chancellor Philip Hammond has defended his department, boasting that he and his team have been taking a “collaborative approach” towards EU exit negotiations rather than a “confrontational” one.
While it is indeed shambolic and rather astonishing to see two of the British government’s most senior ministers attacking each other in this way, both are actually telling the truth.
Hammond’s predecessor George Osborne was a fervent campaigner to keep Britain in the EU, reflecting the preference of the City of London, the Bank of England, the Confederation of British Industry, the Institute of Directors, the Engineering Employers Federation and most sections of big business. He maintains that advocacy today as editor of the London Evening Standard.
It was on Osborne’s watch that the Treasury produced its dodgy dossier in the run-up to the June 2016 referendum, warning that every household in Britain could be £4,300 a year worse off by 2030 should voters opt for Brexit.
Without a bilateral trade agreement with the EU, it insisted, that figure could be as high as £6,600. And the British economy would be between 6.2 and 9.5 per cent smaller than had we remained in the EU. And a tax take shrinkage of £36bn could mean an additional 8p in the pound on the basic rate of income tax.
These doom-laden prognostications dovetailed neatly with warnings a few weeks later from Bank of England governor Mark Carney.
Six weeks before polling day, echoing a report from his bank’s monetary policy committee, he claimed that a Leave vote could have “material economic effects,” including lower growth, higher inflation and at the very least a “technical recession.”
Since his appointment by fellow Remainer Theresa May, Chancellor Hammond has continued this pro-EU line, working closely with the government’s business advisory council which includes top executives from the CBI, the EEF, Lloyd’s Banking Group, Legal & General, BT, Royal Mail, the British Chambers of Commerce, Bloomberg, Virgin Money and Rolls-Royce.
Between them, the pro-EU majority in the Cabinet, the Treasury and big business have already secured a transition agreement that would perpetuate EU single market and customs union rules here after Brexit in March 2019, until the end of 2020.
However, push-back by Cabinet Brexiteers has led to business leaders expressing frustration that they have not yet been allowed to shape the delayed white paper on proposals for Britain’s post-Brexit relationship with the EU.
True to form, EU chief negotiator Michel Barnier is taking full advantage of this division in Tory ranks. He is intent on using the confected Irish border question to widen them by throwing cold water on the government’s latest “backstop” plan.
Barnier wants no “backdoor” continuation of Britain’s compliance with EU neoliberal and monetarist rules. No “collaborative approach” for him. He thinks the EU has a big enough fifth column in Britain to achieve full and open capitulation.
That might split the Tory Party, but at least it would ensure that an incoming Labour government would face a formidable set of obstacles to many of its left and progressive policies.
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