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Philip Hammond attacked for ‘distancing himself’ from PM over Brexit

CHANCELLOR Philip Hammond’s attempts to ‘distance himself’ from Theresa May on Brexit illustrate the weakness of the prime minister and the ‘disarray’ the government finds itself in, Labour has said.

Shadow chancellor John McDonnell said the ‘serious split’ between the pair over exiting the European Union ‘undermines’ Britain’s position in negotiations.

It comes after Mr Hammond said immigration would be managed but not ‘shut down’ after a ‘jobs first’ Brexit that prioritises economic prosperity, in a keynote Mansion House speech which appeared to indicate his favouring of a ‘softer’ withdrawal from the EU.

Mr McDonnell said: ‘We have seen the chancellor again trying to distance himself from the position of his prime minister on Brexit.

‘It just shows further disarray at the top of government. The fact that there is clearly such a serious split between Number 10 and 11 is very worrying and only helps to undermine our country ahead of the Brexit negotiations.

‘It further shows just how weak a position Theresa May is in. And raises the serious question of: how can she negotiate Brexit when her own chancellor is so publicly disputing her position on Brexit and briefing against his own Cabinet colleagues?

‘Serious split’: Shadow chancellor John McDonnell PICTURES: GETTY

‘The truth is that the government’s spin… over a ‘hard’ or ‘soft’ Brexit is just a smokescreen to paper over the cracks of the divide at the very heart of this Tory government.

‘The reality is that they are really planning a Brexit for the few by turning our county into a tax haven off the coast of Europe, which diminishes workplace rights and undermines working people’s living standards.’

Mr McDonnell also claimed austerity was set to continue under the Tories.

Mr Hammond used his speech to repeat his assessment that Britain is ‘weary’ of austerity ‘after seven years of hard slog’ but also committed to the deficit reduction plan set out in the Autumn Statement, to achieve a balanced budget by the middle of the next decade.

Mr McDonnell said: ‘The chancellor has made clear this morning that the message remains the same — austerity will continue. The Tories have learnt nothing from the General Election, and the last seven wasted years of economic failure.

‘The Conservatives have no understanding of the depth of suffering, stress and insecurity their long austerity regime has caused.’

The shadow chancellor also called on the government to boost support offered to businesses if the UK loses access to the European Investment Bank (EIB), after Mr Hammond signalled he would look to maintain involvement.

‘Only a Labour government will secure a Brexit for the many that will put jobs and the economy first, and ensure that working families and small businesses are protected from any challenges our country faces after leaving the EU,’ Mr McDonnell added.

Liberal Democrat Treasury spokesman Sir Vince Cable told Mrs May to heed the chancellor’s call for a transition period and Bank of England governor Mark Carney’s assessment that Brexit will lead to job losses and price rises.

He also highlighted warnings against leaving the EU without a deal from the Society of Motor Manufacturers and Traders, manufacturers’ organisation EEF, and the Chemical Industries Association.

Sir Vince said: ‘Theresa May must listen to Philip Hammond’s warnings instead of locking him in the cupboard with his spreadsheets again.

‘The economic risk of an extreme Brexit is very real and its consequences would be felt by us all, from higher prices to less funding for our NHS and schools.’

■ BANK of England governor Mark Carney has said that now is not the time for an interest rate hike, while wages continue to stagnate and the impact of Brexit on the economy is unclear. Speaking after three Bank policymakers called for a rate rise amid warnings that Brexit-fuelled inflation is set to surge further over the summer, Mr Carney said ‘now is not yet the time to begin that adjustment’. Following Mr Carney’s announcement, the pound hit a one-week low, shedding half a cent to $1.2675 against the US dollar, and is down against the euro too.