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HAMMOND: Flights between Britain and the EU could stop in the absolute worst case Brexit outcome

Business Insider UK logoBusiness Insider UK 11/10/2017 wmartin@businessinsider.com (Will Martin)
Philip Hammond © Provided by Business Insider UK Philip Hammond

LONDON — Flights between the UK and the European Union could "theoretically" stop on the day Britain officially drops out of the bloc, Chancellor Philip Hammond told MPs on Wednesday.

Speaking to the Treasury Select Committee, Hammond discussed the Treasury's contingency planning for the chance that Britain ends up falling out of the EU without securing a deal on trade. 

He said that while flights stopping would represent the "most extreme scenario," it is not beyond the realms of possibility.

"Obviously one can plan for the most extreme scenario. Let me give you an example. It is theoretically conceivable that in a no deal scenario there will be no air traffic moving between the UK and the European Union on March 29th 2019," Hammond told the TSC's chair Nicky Morgan.

"I don't think anybody seriously believes that is where we will get to," he said.

"It's very clear that mutual self interest means even if talks break down, even if there is no deal, there will be a very strong compulsion on both sides to reach agreement on an air traffic services arrangement."

"There is a range of outcomes, and what we will need to do at a point in time is determine what is a realistic worst case scenario that we need to plan for, and invest for."

Watch: Is a second Brexit referendum likely? (Bloomberg)

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Hammond is not the first person or institution to warn on the possibility of air traffic between Britain and the EU ceasing, with Michael O'Leary, Ryanair's CEO saying in March that there is a "distinct possibility of no flights between Europe and the UK for a period from March 2019 in the absence of a bilateral deal."

"It is utter madness for anyone to think that a Brexit ‘no deal’ would be anything but a total disaster for our world leading UK aviation sector and beyond," the British Airline Pilots Association said in a statement on Wednesday.

During the same hearing, Hammond said explicitly that the UK's economic prospects are being "dampened" by Brexit uncertainty.

"While the UK economy is fundamentally strong and in good shape, we are being affected by uncertainty over the negotiation process that we are engaged in at the moment," he told MPs.

"There's plenty of anecdotal evidence that business and consumers are waiting to see what the outcome is or at least what the direction of travel is before firming up investment decisions and consumption decisions."


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