Philip Hammond warns no-deal Brexit would 'hijack' referendum result

Philip Hammond - Image credit: PA

Boris Johnson and his fellow Tory leadership contenders have no mandate to pursue a no-deal Brexit if they become prime minister, Philip Hammond will warn.

The Chancellor will argue that leaving the European Union without an agreement would represent a "hijacking" of the 2016 referendum result that would "knowingly" put the economy at risk.

And he will tell MPs they now face the "real risk" of a new prime minister "abandoning" efforts to leave the EU with a deal.

The intervention will be seen as a clear warning to Tory leadership hopefuls including Boris Johnson, Dominic Raab and Esther McVey, who have in the past pushed for a no-deal exit from the bloc.

Foreign secretary Jeremy Hunt and Liz Truss – another who is considering a leadership bid – have also said the UK should be prepared to leave without a deal if necessary.

In a speech to the CBI business group on Tuesday evening, the Chancellor will warn: "On the populist right, there are those who claim the only outcome that counts as a truly legitimate Brexit is to leave with no deal.

"Let me remind them – the 2016 Leave campaign was clear that we would leave with a deal.

"So, to advocate for no deal is to hijack the result of the referendum, and in doing so, knowingly to inflict damage on our economy and living standards, because all the preparation in the world will not avoid the consequences of no deal."

Hammond will urge MPs to get behind Theresa May's Brexit deal in next month's fresh Commons vote, warning that a failure to do so risks handing the Brexit process over to a leader actively pushing a no-deal outcome and putting the future of the UK at risk.

"If we do not resolve this issue in the next few weeks, there is a real risk of a new prime minister abandoning the search for a deal, and shifting towards seeking a damaging no-deal exit as a matter of policy... in order to protect an ideological position which ignores the reality of Britain’s economic interests and the value of our union," he will say.

His stark intervention comes after Conservative MPs determined to avoid a no-deal declared war on the "intolerant" hardcore Brexiteer wing of their party.

The newly-formed ‘One Nation Conservatives’ group said they would fight against any candidate who might usher in a no-deal departure from the EU.

Digital minister Margot James told a gathering in parliament: "There are candidates who will go out of their way to make sure the country doesn’t leave without a deal and that is what we need to ensure we get out of this leadership contest."

The warnings came as Theresa May prepared to ask her Cabinet to accept some of Labour's Brexit demands following weeks of ill-fated talks aimed at trying to strike a deal with the Opposition.

The Prime Minster has promised a "bold new offer" when MPs vote on the Withdrawal Agreement Bill in early June, despite talks between the UK Government and Labour breaking down.

The Times reports that Mrs May will warn the Cabinet they could have to accept a temporary customs union with the EU and grant concessions on workers' rights in order to secure enough votes to pass the deal.

But the move risks angering avowed Brexiteers in the Cabinet including Liam Fox and Andrea Leadsom, with one source telling the paper that the UK Government was on standby for resignations.

The Cabinet will also discuss stepping stepping the UK Government's work on "frictionless" trade at the Northern Ireland border, a move designed to win over Eurosceptics who have long opposed the deal over its Irish backstop provision.