Philip Hammond will mount a last-ditch attempt at Monday's cabinet meeting to prevent a crackdown on low-skilled EU migration, warning Theresa May that the UK economy requires these workers to meet the government’s stated priorities on housebuilding, business, health, and social care.
The chancellor is to oppose stripping the special status currently afforded to EU migrants because, he will argue, key areas of the economy are reliant on low-skilled immigration from European countries.
Hammond will say he agrees free movement should end, but that the health and social care sectors and areas of the economy such as educational assistance and housebuilding will be hit if there is a crackdown on low-skilled EU migration.
He will also say that a squeeze on migration will earn the UK a reputation as anti-business.
But Number 10 has insisted there will be no sellout on immigration. Allies of May told BuzzFeed News that immigration is her priority in the Brexit negotiations.
One said: “The PM believes that concerns about low-skilled migration from the EU were a driving force behind the Leave vote. Arguments about regulatory frameworks and customs unions are one thing, but voters will not forgive a sellout on immigration and there won’t be one.”
Home secretary Sajid Javid is expected to deliver a presentation to cabinet making the case for preferential treatment for EU migrants to end, based on the recommendations of last week’s report from the Migration Advisory Committee.
However, Hammond is expected to tell the prime minister that such a move would make it difficult for the government to keep its promises to prioritise the NHS, housebuilding, and business.
The chancellor is said to accept that income differentials with some EU countries have caused problems. He is said to be open to looking at a system that could prioritise low-skilled migration from certain EU countries, but not others.
The chancellor’s position on a no-deal Brexit is also said to have hardened in recent weeks. BuzzFeed News understands that he is now vocally opposing the PM’s mantra that “no-deal is better than a bad deal”, and would actively make the case against no-deal if the subject is brought up at cabinet.
May will seek agreement from her cabinet on the overarching principles of her post-Brexit immigration policy but leave the details to be decided during the transition period. This has caused fears among some Brexiteers that there could be a sellout after a deal is agreed.
There is also frustration today among backbench Conservative Brexiteers that their allies in cabinet are not moving more decisively to kill off the Chequers plan. They are applying pressure on Brexit secretary Dominic Raab to ask the prime minister to pivot to a Canada-style deal.
Seven members of the cabinet — Raab, Javid, Jeremy Hunt, Liam Fox, Penny Mordaunt, Esther McVey, and Andrea Leadsom — are now believed to support pushing for a looser arrangement with the EU.
A Brexit-supporting Tory MP told BuzzFeed News: “If Dom was the Brexit secretary who chucked Chequers and got us Canada, he knows he could well end up as the next prime minister. Of course he is waiting for his moment, but there is very little time left and in the interests of the country he has to do this sooner rather than later.”
Brexiteer government sources said they did not expect that crunch point to come at today’s cabinet. “We have to be able to say in good faith that we tried to get Chequers to work,” one said.
A second government source insisted there would be a move to attempt to force the prime minister to pivot to a Canada-style plan, but predicted this would not happen for a few weeks, or possibly even until November.