Philip Hammond: Most top UK ministers back Brexit transition period — Likely to need to be “a couple of years” — Hits back on pay of public servants

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Phillip Hammond. Getty images

LONDON (Reuters) – Senior British government ministers are becoming convinced of the need for transitional arrangements to reduce disruption as Britain leaves the European Union, finance minister Philip Hammond said on Sunday.

Hammond, who supported remaining in the EU at last year’s referendum, is seen as the voice of a so-called ‘soft Brexit’ within Prime Minister Theresa May’s cabinet, favoring prioritizing trade ties with the EU over curbing immigration.

He has repeatedly talked about the need for a transitional deal, saying such an arrangement would see Britain replicate as much as possible the existing arrangements in order to minimize the impact on business.

“Five weeks ago the idea of a transition period was quite a new concept, I think now you would find that pretty much everybody around the cabinet table accepts that there will be some kind of transition,” Hammond told the BBC’s Andrew Marr show.

“We’re into a real process now with the start of negotiations and I think you’ll find the cabinet rallying around a position that maximizes our negotiating leverage and gets the best possible deal for Britain.”

Brexit minister David Davis is due in Brussels on Monday for a first full round of Brexit talks.

Hammond said the government needed to provide as much clarity as possible, as soon as possible, to restore business and consumer confidence and get the economy moving.

“It is absolutely clear that businesses, where they have discretion over investment, where they can hold off, are doing so and you can understand why, they are waiting for more clarity about what the future relationship with Europe will look like,” he said.

Hammond said the length of any transitional period would depend on how long is needed to get new systems in place to handle areas such as customs and immigration, but it should be a defined period and was likely to need to be “a couple of years”.

Reporting by Kylie MacLellan and William Schomberg; Editing by Keith Weir


BBC News

Philip Hammond: Public servants are paid ‘premium’

Philip Hammond

Public sector workers receive a 10% “premium” over the private sector, said Philip Hammond, who said colleagues should not be leaking cabinet talks.

The chancellor refused to comment on reports he said at a cabinet meeting that public servants were “overpaid”.

Mr Hammond told Andrew Marr the question of overpayment was “relative” but the 10% premium was a “simple fact” once pensions were taken into account.

John McDonnell said Labour would end the 1% cap on public sector pay rises.

The shadow chancellor said his party had set aside £4bn on an annual basis to bring pay in line with inflation.

Pay rises for most public sector workers are set by independent pay review bodies, but have effectively been capped at 1% each year since 2013.

Before that, there was a two-year freeze on pay for all but the lowest-paid workers.

The government has come under pressure over the policy since the general election, with some Conservative ministers speaking out in favour of lifting the cap.

On the BBC’s Andrew Marr Show, Mr Hammond was asked about a Sunday Times report claiming he had said public sector workers were “overpaid” compared with the private sector.

‘Job at hand’

He said he was not going to discuss what was and wasn’t said in a cabinet meeting.

“I do think on many fronts it would be helpful if my colleagues – all of us – focused on the job at hand,” he said.

Mr Hammond said public sector pay had “raced ahead” of the private sector after the economic crash in 2008, and that – when pension contributions were not taken into account – the gap had “now closed”.

But he said public sector employers made “very generous contributions” to workers’ pensions, meaning the public sector “are still about 10% ahead” in terms of pay.


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