Press

Hammond seems to have a well-read advisory team. This bit of the speech seemed to have been written in direct response to Simon Tilford’s pamphlet on Britain’s mediocre economy, published last week (picked up in Free Lunch and later by Martin Wolf). Hammond pointed out that labour productivity in Britain is worse not just than that of the US and Germany, but also France and Italy. He pointed out that changing this requires greater investment in infrastructure and skills. And he highlighted the large disparity in prosperity between different regions of the UK. It was as if he was ticking boxes set out by Tilford, since these were the main headings in the pamphlet.

Charles Grant, of the Centre for European Reform, says the reason the EU is taking such a tough stance — not only rejecting pre-negotiation but also insisting that the UK cannot have the single market without freedom of movement — is fear of populism.

Charles Grant, the director of the Centre for European Reform, has published a paper in which he reveals that negotiators in other countries including France and Germany are preparing to stand their ground in Brexit negotiations. They believe freedom of movement is a central part of the single market and are reluctant to make concessions in other areas. "She is trying to square a circle and none of us know how she plans to do it, but British companies will not be in the single market if she limits immigration and spurns or rejects ECJ rulings," said Grant.

Charles Grant of the Centre for European Reform likens it to a divorce settlement, "dividing up the properties, institutions and pension rights, and dealing with budget payments and ... the rights of UK citizens in the EU and vice versa".

Christian Odendahl, an economist at the Centre for European Economic Reform, a think-tank, says that including such a controversial provision in TTIP was probably a mistake; legal systems in America and Europe are developed enough for investors not to need the extra legal certainty.

John Springford, head of research at the Centre for European Reform, said it was hard to see TTIP talks resuming in 2017. "The window of opportunity for getting TTIP done was before we got into the US election campaign, and certainly before the French and German elections got under way [in 2017]. I think that window of opportunity is now closed."

"People find ways around barriers," says Ian Bond, director of foreign policy at the Centre for European Reform, a London-based think-tank. "Unless you start making them particularly inhumane, people are going to find other ways of getting through the system."