Cabinet at war over Brexit as Davis and Hammond square-up

The Chancellor wants to avoid a ‘disruptive and dangerous cliff edge’ in trading links with the European Union after Brexit.

But addressing company executives, the Davis said he believed exit talks would be done by the two year deadline – raising the spectre of no deal and the hardest of Brexits..

Asked if the UK would be straight out of the customs union, he replied: ‘I would have thought so.’

The Brexit Secretary said any transition period was likely to end in 2022 as he described Hammond’s previous comments on the potential timescale as ‘not quite consistent with one another’.

He added: ‘What he’s actually said, the most important thing is it’s got to be done before the election so that’s a maximum of three years.’

Davis said he was ‘entirely aligned’ with the Chancellor on putting jobs and prosperity first.

‘I firmly believe that our approach puts jobs and prosperity first. So much so I didn’t even think it was necessary to say it at the beginning,’ he told The Times CEO Summit.

Davis said there would be ‘practically no burden’ on businesses at all under the Government’s plan to extend rights to EU citizens already living in the UK.

He added: ‘My job is to bring back control of migration to Westminster.

Hammond, speaking in Berlin to the CDU Economic Council, insisted there had to be a ‘smooth and orderly path’ to the new arrangements under any Brexit deal.

Although he did not put a timescale on the transitional process, Hammond said: ‘Whether it is the British importer renewing a contract with a French component supplier, the German car exporter investing in its UK distribution network, the Dutch grower who is making a contract with a British supermarket chain or the Italian electricity company hedging its exposures through London’s financial markets, they all need certainty, well ahead of time, that they won’t have tariffs suddenly imposed on them, part-way through their contracts or that their shipments won’t face customs delays and bureaucratic costs or that the enforceability of their contracts will not be called into question.

‘Early agreement on these transitional arrangements so that trade between our countries can carry on flowing smoothly will reduce uncertainty, unlock investment decisions, instil business confidence and protect jobs and prosperity, in Britain, in Germany and across this continent.’

In a sideswipe at Foreign Secretary Boris Johnson’s position of being in favour of ‘having our cake and eating it’ by securing all the benefits of EU membership without the drawbacks, Hammond said: ‘The question is not whether to have cake, or eat it or even who has the largest slice, the question that matters is whether we can be smart enough to work out how to continue collaborating together, to keep the cake expanding, for the benefit of all.’