Tory Eurosceptics brand Hammond 'only too willing to do Brussels' bidding' over 'Brexit status quo' comments

Conservative Eurosceptics have accused Philip Hammond of trying to thwart Brexit after he said the transition deal would see the present rules of EU membership continue for at least two years after the UK leaves.

On a trade mission to China, Mr Hammond was asked whether the UK would be subject to the jurisdiction of the European Court of Justice (ECJ) and remain in the single market and customs union during the transition phase.

The Chancellor told Sky News: “In a word, yes.”

Former Tory leader and prominent Brexiteer Iain Duncan Smith slammed Mr Hammond in a blue-on-blue attack, claiming he “appears only too willing to do Brussels’ bidding”.

Mr Duncan Smith accused the Chancellor of saying something that goes against the Government’s stated position.

“The Chancellor’s comments today are not government policy, which we should stick to. As it is, he is undermining the Prime Minister’s negotiations with the EU.”

Another Brexiteer Tory, Peter Bone, accused the Chancellor of having his thinking clouded by “jetlag”.

“I’m not sure where the Chancellor is coming from. What he seems to be repeating is all the things the EU is demanding before the negotiations have even started. That can’t be possibly right.

“I mean, maybe the Chancellor’s a bit jetlagged in China or something. But it doesn’t seem to be Government policy and the Prime Minister needs to slap him down on it.”

And former Brexit minister and MP David Jones said the Chancellor’s statement “looks awfully like a capitulation”, adding that: “Our negotiating position needs to be agreed, not made up on the hoof.”

Mr Jones, a member of the Leave Means Leave campaign, called on Theresa May to assert her authority.

“I can only hope that the Prime Minster will once again overrule her Chancellor and make clear that Brussels’ demands are anathema to the UK.

“Meekly agreeing to the EU’s demands that we are subject to their rules and the jurisdiction of the European Court of Justice for two years is completely unacceptable.

“It points a dagger at the heart of Brexit and at the will of the British people expressed in the referendum.”

The Brexit talks are set to move to the second stage after the first round of negotiations was finally completed on Friday.

This week, the Cabinet is expected to meet to set out what the UK’s future trading relationships might look like.

The transition period is expected to last two years from March 2019 but could prove a major sticking point with Eurosceptics.

It could leave International Trade Secretary Liam Fox unable to finalise trade arrangements with other countries until at least 2021.

Setting out his vision for the transition, Mr Hammond said: “What (British businesses) should expect as a result of the agreement we’ve reached this week with the European Union is a transition, or implementation period, which will start at the end of March 2019, during which we will no longer be members of the European Union.

“We won’t technically or legally be in the customs union or in the single market, but we’re committed, as a result of the agreement we’ve made this week, to creating an environment which will effectively replicate the current status quo so that businesses can carry on trading with their commercial partners across the EU as they do now, borders will operate as they do now, and financial services businesses will be able to carry on conducting their business across borders as they do now.”

The four-page document released following the conclusion of the first phases of talks makes clear the EU expects the UK to continue following all of its rules – including freedom of movement.

Another high-profile Brexiteer Jacob Rees-Mogg urged Ms May not to go along with Brussels’ demands, suggesting crashing out of the bloc with no deal would be better.

Speaking on the BBC’s Newsnight, he said: “We cannot be a colony of the European Union for two years from 2019 to 2021, accepting new laws that are made without any say-so of the British people, Parliament or Government.

“That is not leaving the European Union, that is being a vassal state of the European Union, and I would be very surprised if that were government policy.”

Following her first Commons defeat over an amendment to the EU Withdrawal Bill calling for MPs to have a 'meaningful vote' on the final deal – which the Government opposed – Ms May will attempt to stave off further rebellion by supporting an amendment which gives MPs the power to push back the Brexit deadline from March 29 2019 – with the consent of the other 27 member states.