Chancellor says “no deal” Brexit could see flights between EU and UK grounded

The Chancellor told MPs that a no-deal Brexit could
mean flights between the UK and the EU are
suspended the day after we leave the EU.
But Philip Hammond, who was being grilled by
members of the Treasury Select Committee, said it
was likely an agreement on air traffic services.
Mr Hammond told MPs: "Obviously one can plan for
the most extreme scenario.
"It is theoretically conceivable that in a no deal
scenario there will be no air traffic moving between
the UK and the European Union on the 29th March
2019 but I don't think anybody seriously believes that
that is where we will get to. "
The chancellor, who will deliver his budget in six
weeks, has been criticised for saying that he wouldn't
set aside money to prepare for a no-deal.
Mr Hammond said he would only spend the money
"when it is responsible to do so".
But in the hearing this morning the chancellor
rejected the interpretation of his views saying,
instead, that he would spend when he needed to.
He told MPs this morning: "There is a range of
outcomes and what we will need to do at a point in
time is determine what is a realistic worst case
scenario that we need to plan for and invest for."
The British Airline Passengers Association (BALPA)
agrees that UK airlines could have to stop flying
without a deal because there are no 'World Trade
Organisation or any other rules to fall back on' for
aviation.
Their general secretary Brian Strutton said yesterday
in a statement: "UK airlines could find they have to
stop flying – it’s that serious. And this would impact
passengers long before March 2019 because airlines
couldn’t sell advance tickets and, frankly, would
passengers risk buying them?
"It is utter madness for anyone to think that a Brexit
‘no deal’ would be anything but a total disaster for our
world leading UK aviation sector and beyond.
"After all, without air cargo we will not be able to
export or import freely.
"The entire industry has said that we have to see
evidence of the post-Brexit plan for aviation now if
we are to avert a catastrophic crisis of confidence."
But in the hearing this morning Mr Hammond insisted
it was unlikely that flights would be affected because
it was in both the UK's and EU's interest to agree on
that issue.
"On that specific point it's very clear that mutual self
interest means that even if talks break down even if
there is no deal there will be a very strong compulsion
on both sides to reach agreement on an air traffic
services arrangement."
The Chancellor has reportedly faced calls from Brexit
-backing ministers to do more to show the UK is
ready to quit stalling Brexit negotiations in order to
push Brussels into talking about a future trade
relationship.
European Council president Donald Tusk on Tuesday
all but ruled out EU leaders giving the green light for
trade talks at a crunch summit next week, as there
has not been "sufficient progress" on withdrawal
issues - a financial settlement, citizens rights and the
Irish border.
Mr Hammond made clear the UK would be prepared
for all outcomes, including leaving the EU with no
deal, but stressed he would not commit money to that
scenario now.
The Chancellor said "we must be honest about the
near-term challenges and complexities as we prepare
to leave".
In an article for the Times, he went on: "As Chancellor
of the Exchequer, it is my duty to be realistic about
these challenges, and to carefully navigate the
economy through this process in a way that protects
our jobs, supports our businesses, underpins the
prosperity of working families, and secures our public
finances for decades to come.
"I also need to ensure that we are prepared for all
outcomes, including a no-deal scenario.
"The Government and the Treasury are prepared. We
are planning for every outcome and we will find any
necessary funding and we will only spend it when it's
responsible to do so."
Mr Hammond also stressed the importance of
avoiding a no-deal Brexit, as a lack of clarity about
future trading terms is leading to business uncertainty
and slowed investment.
"I believe the best stimulus we can provide for the
economy right now, is certainty," he wrote.
"We will do that in two ways. First, by securing
agreement on a time-limited implementation period -
this is vital to give businesses and people the space
to prepare for the future. Second, by reaching a deal
on the terms of our future long-term relationship with
the European Union."
The Chancellor's intervention may be interpreted as
an attempt to fight back amid suggestions that pro-
Brexit MPs want him ousted over his apparent support
for a softer Brexit.
Mrs May has faced calls to reshuffle her Cabinet
following her mishap-strewn Conservative Party
conference speech, which sparked a botched plot to
oust her from Downing Street.
Other Tory MPs are thought to favour the sacking of
Foreign Secretary Boris Johnson over weeks of
perceived disloyalty over Brexit.