Hammond Mocks Johnson as Brexit Continues to Divide: Tory Update

(Bloomberg) -- The Conservatives are meeting for day two of their annual conference in Birmingham with a party divided on how to pull away from the European Union and struggling to get behind Prime Minister Theresa May’s Brexit plan. Chancellor Philip Hammond has weighed in to defend her; he gives the keynote speech Monday.

ConservativeHome poll shows who are the favorites (9:12 a.m.)

A poll of grassroots Tories puts Boris Johnson as the clear leadership favorite, with Home Secretary Sajid Javid in second place. Johnson is due to address a rally at lunchtime and people will be lining up for that from mid-morning.

Pro-EU Tories relegated to the fringes (9:08 a.m.)

A meeting of the Conservative Group for Europe this morning emphasized the extent to which support for EU membership has become a fringe position in the party.

Fewer than a hundred people were in the room to hear lawmakers Nicky Morgan and Antoinette Sandbach set out the prospects for staying close to the EU. Morgan was scathing about the idea there were trade deals ready to sign -- "a mirage," she called it -- and the attacks on business from her colleagues. But the mood was somber. It’s just over three years since the Tories fought an election promising to keep Britain in the EU. Now that’s barely even a fringe position in the party.

A Brexiteer Speaks out (9:05 a.m.)

Marcus Fysh, a 48-year-old former investment banker, is a Tory lawmaker and among those who want maximum distance from the EU. We interviewed him on Sunday about where he thought May’s Brexit plan was headed.

Hammond: Tories Are ‘Party of Business’ (8:40 a.m.)

Sticking with domestic politics, Hammond used an interview with BBC Radio to talk up the Conservative Party’s economic credentials, which have been less obvious amid the divisions over Brexit. He also references the Labour Party leadership, suggesting the Tories are worried about losing votes in this area.

“The Conservative Party has business at its core, and I will say today that we support business, we’re the party of business, we always will be the party of business,” Hammond said. “There are shortcuts -- never mind what Jeremy Corbyn or John McDonnell will tell people -- there are no shortcuts, we have to grow this economy.”

Grayling Wants Utilities to Pay for Potholes (8:10 a.m.)

Transport Secretary Chris Grayling is considering making utility companies pay a deposit every time they need to dig up the roads to fix cables and pipes, according to a person familiar with the matter, to help stop a pothole epidemic in roads up and down Britain. The money would only be returned if they repair the asphalt to a high standard.

Read more: U.K. Transport Secretary Wants Utilities to Pay for Potholes

It’s another example of how the government is trying to show that it has domestic policies and isn’t paralyzed by Brexit. The opposition Labour Party is piling on pressure, rolling out a slew of policies at its own conference last week to overhaul the economy if it won power.

Hammond Defends May’s Brexit Blueprint (7:56 a.m.)

Hammond has been doing the media rounds this morning, defending May’s so-called Chequers plan for Brexit, and standing by his attack on Boris Johnson in a Daily Mail interview published late Sunday.

Hammond told the BBC there’s room for further compromise on a Brexit deal with the EU, including on customs arrangements -- but that the government’s red lines remain in place on ending free movement, taking back control of laws and ending annual payments to the bloc.

He reiterated his view that a no-deal Brexit would be bad for the British economy, but also insisted the country could cope in such a scenario.

©2018 Bloomberg L.P.