UK Edition
Boris Johnson's ally attacks Philip Hammond's plan which could see thousands of EU citizens move to Britain after Brexit
Philip Hammond's Brexit transition plan has come under public attack from Boris Johnson’s economic guru, as significant Tory splits begin to emerge.
Gerard Lyons, the leading City economist, criticises the Chancellor for exploiting Theresa May’s absence on holiday to publicise his own Brexit views.
Writing for the Telegraph, Mr Lyons demands that any transition phase is just two years long – a year shorter than outlined by Mr Hammond.
And he compares warnings of a Brexit “cliff-edge” for businesses to hysteria over the Millennium Bug, which never came to pass.
“There is alarmist talk of a cliff-edge,” he writes. “It reminds me of the Y2K bug where computers were apparently going to stop at the millennium.”
He adds: “Many of the ‘risks’ being highlighted about Brexit are perceived risks, not real risks. And a two-year transition would alleviate many concerns.”
The intervention from such a close ally will inevitably fuel speculation that Mr Johnson, the Foreign Secretary, disagrees with elements of Mr Hammond’s Brexit plan.
Mr Lyons, who worked for three years at City Hall while Mr Johnson was mayor of London, is said to have played a key role in convincing him to back Brexit.
On Saturday Mr Johnson continued his public silence on the proposals, with aides saying he would share any views privately with the Cabinet.
In more signs of concern about the plans, sources on the most powerful Tory Eurosceptic bloc – the European Research Group – demanded more clarity over Mr Hammond’s proposals.
One central figure warned that the transition phase must not be a “bridge to nowhere”, saying any attempt to water down the final terms of Brexit would trigger revolt.
This week the most significant development in the Government’s stance on Brexit for six months unfolded as Mr Hammond went public with a new “transition” proposal.
Under the plan, EU migrants could continue to move to the UK freely after Brexit – due in March 2019 – and rulings by the European Court of Justice may still apply.
Instead of being felt immediately, the benefits of Brexit would be phased in over a three-year period leading up to the 2022 general election.
The proposal has been welcomed in some quarters, with Opposition figures and some prominent Tories agreeing that a transition phase is needed to protect British businesses.
However, a leading migration think tank has said hundreds of thousands of EU citizens could continue to move to Britain after Brexit if they effectively retain their free movement rights.
Mr Lyons is Mr Johnson’s former chief economic adviser at City Hall. Announcing his appointment in 2012, Mr Johnson praised Mr Lyons’s “decades of experience analysing the economic outlook at all levels”.
Writing for this newspaper in a personal capacity, Mr Lyons makes clear he supports a Brexit transition period but questions Mr Hammond’s proposal and his decision to go public earlier this week.
Mrs May was on holiday in Italy, while Cabinet Eurosceptics including Mr Johnson, Liam Fox, the International Trade Secretary, and Chris Grayling, the Transport Secretary, were also abroad.
Mr Lyons writes: “Enough is enough. The leader is away so those in senior other roles seem to think they can play.
“The trouble is, new ideas on Brexit should not be floated in public in the way they currently are, as if government policy is being made by whoever can occupy the news agenda that day. There is a need to return to some Cabinet collective responsibility on this, the most important issue of our day: Brexit.”
Mr Lyons raises fears that if a transition period is any longer than two years, it could allow those calling for a softer Brexit to win out. “It has to be temporary, else the powerful elites who are sitting pretty will want it to be never ending,” he writes.
“The CBI [Confederation of British Industry], who talk for big firms but not small or medium-sized ones, have already hinted at such a transition taking on a more permanent nature. Let’s not forget the ‘Norway option’ we often hear about was temporary and that was decades ago. So our transition should be fixed and two years works well.”
Debates about the terms of transition are likely to become the new front line in the Conservative Party’s internal battle over Brexit.
Cabinet ministers who back Mr Hammond’s plan said that it was impossible to have the infrastructure for new immigration rules or customs arrangements in place by March 2019.
Many of the details on how Brexit will work, such as when rules on migrants will be tightened or the benefits of single market membership removed, will be decided during Brexit talks with the EU.
Alp Mehmet, of Migration Watch UK, told this newspaper: “If the current arrangements remain after Brexit, net migration from the EU could continue at well over 100,000 a year during any transitional period. That is not what people voted for a year ago.”