Philip Hammond and George Osborne were last night accused of plotting to thwart Brexit over a lobster lunch.
The pair were spotted at a Chelsea restaurant before the Chancellor angered Cabinet colleagues by refusing to release cash to prepare for Brexit.
Mr Hammond agreed to the ‘lobster plot’ meeting despite his Treasury predecessor’s vendetta against Theresa May.
Mr Osborne, who now edits the London Evening Standard, is said to have told friends he would not rest until the Prime Minister was ‘chopped up in bags in my freezer’.
Chancellor Philip Hammond (pictured right) and his predecessor George Osborne (left) have been accused of scheming against the Government’s Brexit plans over a lobster lunch
The pair had a ‘very long lunch’ at Caraffini near London’s Sloane Square, where Mr Hammond ordered the £21.90 house special – lobster on a bed of pasta in tomato and garlic sauce (pictured)
Fellow diners said the pair chatted conspiratorially at a corner table at Caraffini over a ‘very long lunch’.
Mr Hammond ordered the £21.90 house special – lobster on a bed of pasta in tomato and garlic sauce.
Tory MP Nadine Dorries questioned his judgment in talking to such a high-profile critic of Brexit and Mrs May. ‘It sounds very fishy,’ she said.
‘You can tell a lot about people by the friends they keep. We know George Osborne wants to wreck Brexit – why would the Chancellor want to meet him unless he sees Brexit as the enemy?
‘Perhaps it’s time he did the decent thing and stood aside.’
While Caraffini, which offers ‘fine Italian food with modern overtones’, is Mr Hammond’s work lunch location of choice, Tony Blair and Gordon Brown are said to have carved up the Labour leadership at Granita in Islington, north London
News of the meeting came as:
- Mr Hammond was forced to issue a grovelling apology to Brussels after describing the EU as ‘the enemy’
- Mr Osborne urged the Tories to ‘confront’ the issue of Mrs May’s leadership
- Jean-Claude Juncker warned Britain would ‘have to pay’ its debts before trade talks started
- Tory sources said ministers were pressing Mr Hammond to release Brexit cash;
- The CBI, which wants the UK to stay in the single market, urged ministers to unite behind Mr Hammond’s Brexit vision
- Downing Street was forced to say the PM had ‘full confidence’ in the Chancellor.
Restaurant plotting has a long history in politics – Tony Blair and Gordon Brown are said to have carved up the Labour leadership at Granita in Islington.
Mr Hammond is believed to be a regular at Caraffini, which offers ‘fine Italian food with modern overtones’ near Sloane Square.
A witness to the rendezvous said: ‘They were huddled together – they seemed slightly conspiratorial. They were talking animatedly but seriously.
‘And they were in no rush to leave. Time didn’t seem to be an object. It was a very long lunch.’
Neither Mr Osborne nor the Treasury would comment on the content of their discussions last night.
A Treasury source said: ‘Of course the Chancellor meets Conservative politicians past and present. You would be surprised if he didn’t.’
A friend of Mr Osborne pointed out that in his time at the Treasury he regularly dined with former chancellors and newspaper editors.
Mr Hammond has endured a turbulent week since clashing with other Cabinet ministers on Tuesday over the need to release cash now to prepare for the possibility that Britain might leave the EU without a trade deal.
The Chancellor infuriated Downing Street by writing an article for The Times on Wednesday in which he suggested it would be irresponsible to start making costly preparations now.
Mr Hammond is believed to be a regular at Caraffini (menu pictured)
Mrs May issued a public rebuke within hours, making it clear that the Treasury would be required to fund planning for all eventualities.
And former chancellor Nigel Lawson called for Mr Hammond to be sacked for an approach to Brexit that comes ‘very close to sabotage’.
Mr Hammond’s close relations with his predecessor stand in contrast to his strained relationship with Mrs May.
One Government insider yesterday said the pair ‘can’t bear’ to be in the same room.
Mrs May had planned to sack her Chancellor after the election but was too weakened to carry out the purge after losing her Commons majority.
Speculation is mounting that Mr Hammond could be axed in an autumn reshuffle if next month’s Budget is a flop.
But a spokesman for Mrs May yesterday insisted the pair have a ‘good working relationship’.
Mr Hammond’s decision to maintain cosy relations with Mr Osborne will anger Eurosceptics and raise eyebrows in Cabinet.
The former chancellor, who was sacked by Mrs May last year, is widely suspected of co-ordinating opposition to Brexit from outside government.
He has used the Evening Standard to undermine Mrs May and her ministers.
Several former Cabinet friends and allies, including party chairman Sir Patrick McLoughlin, have now cut all ties with Mr Osborne in protest.
A friend of Sir Patrick said: ‘He has been sent to Coventry. Patrick, who was close to George, isn’t taking his phone calls any more, and he is not the only one.
Mr Hammond is pictured with French Finance Minister Bruno Le Maire as they leave the G20 finance minsters and central bank governors’ meeting in Washington today
‘It is hard to overstate the depth of anger and betrayal within the party over the way George has behaved. His attacks on Theresa are despicable.’
Mr Hammond yesterday rejected claims that he was acting as a brake on Brexit.
The Chancellor, who this week said leaving the EU ‘placed a cloud of uncertainty’ over the economy, insisted it was absurd to suggest that he was talking down the economy.
Speaking at a meeting of the IMF in Washington he tried to strengthen his credentials on Brexit by insisting he was now ready to sanction preparations for the possibility that the UK might leave without a deal.
But in a diplomatic blunder, he overdid the tough talk, describing the EU as the enemy.
Within an hour he took to Twitter to apologise for his ‘poor choice of words’, accompanying his message with the hashtag ‘#NoEnemiesHere’.
Sources at Caraffini told the Daily Mail that the lunch took place at the end of September. But Treasury sources insisted it was earlier.
Philip Hammond’s Basil Fawlty moment: Chancellor tries to act tough by calling Brussels ‘the enemy’ before apologising and saying he won’t resign
Philip Hammond tried to talk tough on Europe yesterday, describing the EU as ‘the enemy’ while visiting the United States.
But the Chancellor was rapidly denounced by one MP for acting ‘like Basil Fawlty on holiday’.
And within an hour of making his comment Mr Hammond was performing an embarrassing U-turn, taking to Twitter to apologise for a ‘poor choice of words’.
His about-turn came as he refused to resign and fought back against criticism that he is ‘sabotaging’ Brexit and undermining Theresa May.
Arriving in Washington to meet global finance chiefs at an International Monetary Fund meeting, Mr Hammond claimed he is fully behind the Prime Minister and backed her speeches on the UK’s Brexit stance at Lancaster House in January and in Florence last month.
A number of Conservative backbenchers have called on the Chancellor to quit over his stance on Brexit.
But Mr Hammond said yesterday: ‘My message is this: I understand that passions are high. I understand people have very strong views about this. But we’re all going to the same place.
‘We all have the same agenda. We’re all signed up to the Prime Minister’s Lancaster House speech. We’ve all signed up to the Article 50 letter. We’re all behind the speech she made in Florence.’
He added: ‘The enemy, the opponents, are out there on the other side of the table. Those are the people that we have to negotiate with. We have to negotiate hard to get the very best deal for Britain.’
Mr Hammond (pictured) landed himself in hot water when he referred to Brussels as ‘the enemy’ on his visit to the United States
In his Twitter apology Mr Hammond said: ‘In an interview today I was making the point that we are united at home.
‘I regret I used a poor choice of words.’ He added: ‘We will work with our friends and partners in the EU on a mutually beneficial Brexit deal #noenemieshere.’
Labour’s Peter Dowd, a shadow Treasury minister, said Mr Hammond’s remarks about the EU being an enemy were both foolish and a sign that he was ‘clearly feeling the pressure from Tory MPs calling for him to be sacked’.
‘The tone of this rhetoric will obviously not unblock negotiations or help protect our economic interests,’ said Mr Dowd.
‘The Chancellor should be putting the country before the infighting in his own party when he is representing us overseas, and refrain from acting like Basil Fawlty on holiday.’
One MP told MailOnline: ‘He has been told he has got to row in behind Brexit and be enthusiastic.
He has tried to do that and messed it up. He has made a total Horlicks.’
Mr Hammond’s U-turn marred what had been a fighting performance from the Chancellor from the moment he arrived in the US.
He flatly refused to resign and pledged to provide all the funding Britain needs to get through Brexit.
The Chancellor said: ‘We have already spent £500million, and we will be making available more resources in the Budget.’
Mr Hammond apologised for his words on Twitter, posting: ‘In an interview today I was making the point that we are united at home. I regret I used a poor choice of words. We will work with our friends and partners in the EU on a mutually beneficial Brexit deal #noenemieshere.’
He will deliver his Budget on November 22 and said he was ready to use the Government’s contingency reserve, its emergency fund of up to £2billion, if necessary.
His tone was dramatically different from earlier in the week when he appeared before the Treasury Select Committee and said the Government would not spend taxpayers’ money preparing for the possibility of a ‘no-deal’ Brexit until the ‘very last moment’.
He said he would not take money from budgets for other areas such as health or education just to ‘send a message’ to the EU.
This prompted former Tory Chancellor Lord Lawson to say his behaviour was ‘very close to sabotage’.
Yesterday, asked directly if he would resign, the Chancellor said: ‘No.’
Mr Hammond said the Brexit negotiations have created economic uncertainty but the underlying economy ‘remains robust’ and he was ‘committed to delivering a Brexit deal that works for Britain and for jobs, business and prosperity’.
And he said that once the uncertainty over the negotiations has gone away he expects the economy to ‘start powering forward and to reach its full potential’.
Thanks for winning the Second World War… but you still have to pay up for Brexit talks to advance, says Juncker
European Commission president Jean-Claude Juncker said: ‘I’m not in a revenge mood – I am not hating the British’
Jean-Claude Juncker yesterday heaped praise on Britain for its role in the Second World War – before saying we ‘would have to pay’ for Brexit talks to advance.
In a rambling speech, the Brussels chief claimed he was ‘not in a revenge mood’ before going on to ridicule parts of the negotiations as ‘nonsense’.
He insisted that the so-called ‘divorce bill’ is the only way to unleash trade talks.
His bizarre intervention came as EU leaders signalled the first major breakthrough in negotiations by preparing to give the green light to discussions on a transition period after Brexit and our future relationship with the EU.
Speaking just hours after documents outlining the plan emerged, European Commission president Mr Juncker said: ‘I’m not in a revenge mood – I am not hating the British.
‘The Europeans have to be grateful for so many things Britain has brought to Europe, during war, before war, after war. But now they have to pay.
‘We cannot find, for the time-being, a real compromise as far as the remaining financial commitments of the UK are concerned.’
He said that the pay-out – estimated at anything between £20billion and £90billion – is not ‘impossible’ for Theresa May to negotiate and likened it to buying a round of drinks.
Referring to the bloc’s 28 countries, he said: ‘If you are sitting at a bar and ordering 28 beers and then suddenly some of your colleagues are leaving, it’s OK but they have to pay.’
In a further dig, Mr Juncker claimed the Brexit process was revealing ‘new problems’ for the UK and suggested the two-year divorce ‘will take longer than initially thought’.
Despite bickering in Brussels about how its rigid negotiating mandate is stopping progress on reaching a deal on citizens’ rights, Mr Juncker also took aim at the UK for the stalemate.
After claiming the UK should have offered to adopt EU citizenship rules for years to come, he said: ‘Why not say easily and with common sense … that things will stay as they are?
‘The Europeans, or ‘foreigners’, as they are saying in London, they are there on the island and so many British friends are here.
So let them here, let them there. Why are we discussing nonsense like that.’
His intervention will be seen as hugely unhelpful by diplomats.
Both sides have been accused of prolonging uncertainty for the 3.5million EU citizens in the UK and the one million Britons in Europe by refusing to cave on a range of issues.
During his address to students in Luxembourg yesterday, Mr Juncker also said he wanted ‘closer integration’.
He denied accusations he is determined to create a ‘United States of Europe’ before adding: ‘I hate this idea but I love this idea.’
His comments follow the first signs of division amongst the bloc over how to take talks forward after the latest round ended in frustration for both sides on Thursday.
The EU’s chief negotiator Michel Barnier, who said the stalemate was ‘disturbing’, has privately pushed to open up talks on a transition period.
But Germany and France have led objections to this, claiming the UK has not offered enough concessions.
Despite this, EU leaders are expected to unlock internal talks on trade next week. The development is contained in draft conclusions for next week’s European Council summit.
Though short of the full trade talks the UK had hoped for, it will be seen as a boon for Mrs May.