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Hammond plays down Brexit delay increasing chance of second vote

The Guardian logo The Guardian 12/04/2019 Larry Elliott in Washington
Philip Hammond wearing a suit and tie looking at the camera: Philip Hammond said Brexit had damaged the UK’s reputation as a place to do business. © AFP/Getty Philip Hammond said Brexit had damaged the UK’s reputation as a place to do business.

Philip Hammond has played down the possibility that the UK could use the delay to Brexit to hold a second referendum and stressed that he still expects the UK to leave the European Union.

Speaking in Washington, the chancellor said that time would be too tight to hold a confirmatory vote before the new deadline of the end of October unless it was triggered over the coming weeks.

Hammond said the damage caused by continued uncertainty – including problems attracting suitable candidates to replace Mark Carney as governor of the Bank of England – meant it was vital that the Brexit issue was resolved as quickly as possible.

Related: Rees-Mogg's sister to stand against Tories in the EU elections

He said Brexit had damaged Britain’s reputation as a place to do business and any further protracted delay in resolving the issue might force him to abandon plans for a long-term review of public spending due later this year.

Asked about the possibility of a second referendum, Hammond said: “It’s a proposition that could and, on all the evidence, is very likely to be put to parliament at some stage.”

brexit concept - double exposure of flag and Westminster Palace with Big Ben brexit concept - double exposure of flag and Westminster Palace with Big Ben

But the chancellor said the government was opposed to a confirmatory referendum and would not support one.

Noting that it would take six months to organise a referendum, Hammond added: “It is unlikely, at a technical level, whether there would be enough time.

“I know some papers have been saying that the EU gave us an October extension so there would be time for a confirmatory referendum but if that had been the motive they would have given us longer. It looks tight to me.

“If in a couple of months time you were putting a bill through parliament you would be struggling to do it – even if you wanted to – in the time available.”

Hammond said the council’s decision to grant the UK an extension to late October had not made it more or less likely that a confirmatory referendum would be held, because the issue would be decided by parliamentary arithmetic.

“It depends on where the Labour party ends up. The Labour party is deeply split and will have to make up its mind where it stands.”

The chancellor said that the process of finding a replacement for Carney – who will leave the Bank of England next January – is getting under way and that he regretted that the Brexit issue had not been resolved first.

“It is blindingly obvious that there may be some candidates who might be deterred because of the political debate around Brexit.”

Brexit: A timeline [Photos]

Carney has come in for criticism from some Conservative MPs over the Bank’s Brexit forecasts and his warnings of the dangers of a no-deal outcome. Hammond said it was unavoidable that the governor of the Bank of England would get involved in the Brexit controversy. “Some candidates might not want to be exposed to the political debate.”

Asked whether Brexit had damaged Britain’s international reputation a place to do business, Hammond said: “It has damaged it, no question. Investment has been delayed and some has been diverted. We talk about it a lot.

“If the outcome is orderly and we settle Brexit in a sensible and civilised way it won’t do us any permanent damage. If we don’t resolve it in an orderly way that will be a different question.”

The idea of a 'Brexit' represented via jigsaw puzzle. 3D rendering graphics. The idea of a 'Brexit' represented via jigsaw puzzle. 3D rendering graphics.

The chancellor said a speedy resolution to Brexit would unleash pent-up investment. Companies were sitting on a £750bn cash pile and had delayed buying new equipment because of the uncertainty. “Once the coast is clear and the uncertainties around access to markets is resolved I expect a very substantial increase in business investment.”

Hammond said continued Brexit deadlock would put at risk his plan to announce the results of a long-term spending review in the Autumn budget.

“If we get a deal through parliament in the next few weeks I expect to conduct a full three-year spending review of resource spending and a longer review of capital spending. If we don’t get a deal done, it probably makes it inappropriate to do a long-term spending review.”

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