Philip Hammond calls for maximum trade access to EU for the UK after Brexit

Jasper Jolly
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Philip Hammond presented a friendly face towards Europe (Source: Getty)

Chancellor Philip Hammond has called for the UK and the European Union to maximise trade access through a "suite of free-trade agreements" to avoid economic harm to both parties.

He also said highly skilled immigration will not be limited.

Hammond said he thinks there is a "shared ambition to get to an end state arrangement that will mean maximising the reciprocal access to each other’s markets," while speaking on a panel at the World Economic Forum at Davos.

Negotiations on the future trading relationship with the EU will begin in March, provided the government sticks to its planned timetable on triggering Article 50.

Read more: Theresa May: The UK "cannot" remain a Single Market member

Immigration controls will play a big part of the negotiations, after it formed a major part of the Brexit campaign. Prime Minister Theresa May this week said the UK would pull out of the Single Market in order to place controls on immigration.

The chancellor said these controls would not limit UK businesses hiring highly skilled workers, as that will amount to "shooting our kneecaps". Animosity towards immigration during the Brexit campaign is aimed at lower paid workers, Hammond said.

"There’s no system that I can conceive of that would be intended or designed to cut off the flow of highly skilled, highly paid people," he said.

Meanwhile, Hammond denied issuing "any threats" on slashing corporate tax, before threatening a "globally competitive corporate tax rate" if the UK is blocked from EU markets.

Read more: Now the Tories give run around on immigration

"If we were to be, by some catastrophe, closed off from those markets we would have to reinvent ourselves," he said. "We’ve reinvented ourselves before. The City of London looks radically different" than it did in the 1970s, he said, referring to deregulation under Conservative Prime Minister Margaret Thatcher, known as the "Big Bang".

On the incoming administration of Donald Trump, Hammond said it could add to uncertainty for Europe, particularly with relation to Russia.

He said: "Brexit has introduced uncertainty. I think the change of administration in the US has probably introduced an even bigger piece of uncertainty."

Hammond said he wishes to end the period of divisiveness of the referendum campaign. He wants to "move from a period when we’ve been in our separate silos hurling verbal rocks and avoiding the real issue."

However, former Italian Prime Minister Mario Monti did not take this message to heart. He accused former UK Prime Minister David Cameron of putting "his country and the whole of Europe on the line" for domestic political reasons.

Cameron used tactics of "“Damaging its [the EU's] reputation, by making the situation confusing,” Monti said.

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