Conservative party conference: Chancellor Philip Hammond says removing Brexit uncertainty is "biggest single stimulus" UK economy could get

Catherine Neilan
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Hammond acknowledged Brexit uncertainty was taking its toll (Source: Getty)

Removing uncertainty around Brexit is the "single immediate stimulus" the government could give the UK's economy, the chancellor has admitted.

Speaking at a fringe event during the Conservative party conference, Philip Hammond admitted uncertainty was the "key reason" for a reduction in business investment. This was one of the main reasons he and Prime Minister Theresa May backed a two-year transition period - which he called a "two-year standstill after exit in March 2019".

"Removing this uncertainty is the single immediate stimulus we can give to this economy," Hammond said, speaking more openly than he had during his flagship speech earlier in the day. "It's a rather a strange position for a chancellor to be in... it does feel to me that removing that uncertainty is the key issue, and all other things should be subordinate to that achievement."

Picking up on his theme from earlier in the day, Hammond called on businesses to back the government in its aim to defend the free market.

"Our generation will not be the first since the Industrial Revolution to be better off than our children, we cannot let that happen, and business will clearly have a role to play there," he said

"We do not expect big business to engage in party political debate, or support political parties, but we do expect them to support the case for the market economy that has doubled our living standards in last 35 years and is the only way to go on delivering rising living standards."

Speaking at the same event, CBI director general Carolyn Fairbairn agreed that business needed urgent "clarity in a number of areas" - Brexit being the top of the list.

She spoke of the "concern and dismay from the business community", and said the threat of a no deal option was "real" - and "absolutely not" the best option for the UK.

"This uncertainty, we believe, is depressing business investment," she added. "This is real and happening now."

There was a "drip drip of lost investment", which would become worse if transition was not "locked in" by the end of the year.

"It's so very urgent," she added.

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