UK Edition
Interview: Philip Hammond on why his relationship with Theresa May doesn't need to be like David Cameron and George Osborne's
Philip Hammond is keen to point out that his relationship with the Prime Minister is very different to the one George Osborne had with David Cameron.
In the three months since Theresa May entered Downing Street and made him her Chancellor, there have been growing reports that their relationship has become strained.
Gone are the days when Mr Cameron and Mr Osborne governed almost as one.
The new Prime Minister prefers to make decisions alone or with only her most trusted advisers, it is said.
It has even been reported that Mr Hammond is no longer a guest at the Prime Minister’s daily morning meeting, something that would have been unthinkable when Mr Cameron and Mr Osborne occupied Downing Street.
However, Mr Hammond suggests that the near-symbiotic relationship maintained by his predecessor and the former prime minister was not necessarily conducive to good government.
“George Osborne had a very close personal and political relationship that goes back a very long way with David Cameron and they worked together in a certain way,” Mr Hammond says.
“Theresa May and I work together in a different way – [though] we’ve also known each other a long time.”
He adds: “The most important thing is that we share clear objectives. That we understand each other’s priorities, we know how each other work and we have a channel of ready communication between us and I’m quite satisfied with the arrangements that Theresa May and I have got.”
Brexit and the single market
In recent days there have been growing reports that Mrs May is seeking a “hard Brexit”, which will see Britain relinquish its membership of the single market so that it can have full control over its borders.
Mr Hammond is dismissive of the attempts to characterise Britain’s exit negotiations as either “soft” or “hard”.
“We’re the world’s fifth-largest economy and creating a relationship between the European Union and the world’s fifth-largest economy is going to be a complex process for which there is no model,” he says. “So it will be a bespoke model. We should be looking for a good Brexit – not a hard Brexit or a soft Brexit.”
There have been reports that Mr Hammond is increasingly concerned that the desire amongst some in Government to control immigration could lead to economic harm, with the European Union denying access to the single market if Britain does not accept the free movement of migrants.
But Mr Hammond is clear that any migration controls must not come at the expense of economic progress.
The Chancellor says: “We’ve got to be clear about one thing – there’s an implicit term of the mandate we received from the British people. It may not have been stated explicitly but it’s implicit. And that is that they do not want to see the economy suffer.
“They do not want to see jobs lost, they do not want to see standards of living decline. So they will expect us to negotiate a solution which delivers the key elements of leaving the European Union, regaining our sovereignty, getting control over our borders – but they will expect us to do all of that in a way that allows the UK economy to go on growing.”
Immigration
Mr Hammond has made clear that whatever immigration controls are enforced as a result of Brexit, “highly skilled” workers will never be “shut out” from Britain.
He says that border controls will be used “responsibly” and that if foreigners are good for the economy, they will be welcomed with open arms.
He has already said that key workers in the financial services industry will be exempt from any controls, but appears to suggest that other sectors will get similar freedoms.
“The message that I want to send to business is that whatever solution we end up, whatever control powers we have over immigration into the UK, we will use them responsibly,” he says. “We will use them in a way that supports the UK economy and we will certainly not use them to shut out highly-skilled people – whether they are bankers or software engineers or managers in global companies – out from the UK when their presence is supporting inward investment and growth in our economy.”
Responsible Capitalism
Mrs May has faced criticism from the country’s biggest firms by taking on big businesses and demanding “responsible capitalism”.
The Prime Minister wants to put workers on company boards and also rein in excessive pay as part of her pledge not to govern “just for the privileged few”.
“Business needs to understand – and I think business does understand - in the wider context it isn’t sustainable to have large household brand name businesses angering their consumers,” Mr Hammond says. “Their consumers, our voters, must be important to them and their reputation, their image with their consumers must be important to them.”
He insists that the measures, particularly plans to put workers on boards, is “something that responsible businesses will recognise can be positive for them”.
Deutsche Bank
Amid growing concerns about the German lender Deutsche Bank, Mr Hammond is quick to reassure voters that the British – and global - banking systems are more “resilient” than before the 2008 financial crash.
He says: “The global banking system is enormously more resilient today than it was in 2008 and I think people should take great comfort from that.
“We have resolution mechanisms in place to ensure if there was a problem with a systemically important bank anywhere in the world, the world’s central banks would co-operate together to resolve it in a way that didn’t contaminate the wider system.”
Mr Hammond adds: “I have a high degree of confidence that those mechanisms that we now have in place are effective and will work if called upon.”
The tech industry
Mr Hammond will use his speech to the Conservative Party conference in Birmingham to announce a huge cash-injection for Britain’s tech industry and life sciences companies.
As well as £100million for life sciences companies, there will be £120million to fund companies researching artificial intelligence and the nano-technology industry.
Mr Hammond says he wants to plough money into the “cutting-edge technologies” setting up in Britain in order to make this county a “global capital” of “innovation”.