Philip Hammond said he would win the Tory leadership contest as he admitted he is “divisive” member of the Conservative Party.
He said he did not enter the leadership contest as many Tory members do not agree with his stance on the future of the UK’s relationship with the EU.
He warned leadership hopefuls not to make “radical” tax cuts, cut red tapes and cautioned against “reckless” solutions.
The chancellor said, “the electorate for the leadership of the Conservative Party is the membership of the Conservative Party. And I know something about the paid-up membership.”
Speaking to LBC Radio he said, “I know that the views of that group are, by a significant majority, Eurosceptic. I know that many of them do not agree with the stance that I have taken to our future relationship with the European Union.
“It’s very important in this competition that there are candidates expressing clearly the view that we must have a negotiated settlement and that we must have a close future trading partnership with the European Union.
“But I think it’s probably better that somebody less divisive within the party than me is making those arguments.”
In a speech to the Resolution Foundation think tank in Westminster, Hammond said on Thursday morning, “Whoever the next prime minister is, one of his or her central tasks will be to show a new and sometimes sceptical generation that a properly regulated market economy remains the most powerful force available to us for unlocking aspiration and raising living standards.
“And bold, decisive action on the national living wage, sustainably delivered, will be an important demonstration of the power of that argument and a necessary step to rebuild confidence in the politics of the centre ground.
“Because that centre ground is under threat. On the left, the Labour Party characterises business as the real enemy. On the right, the argument for radical tax cuts, deregulation and smaller government is gaining ground, just as our population demographics are making them harder to do.
“And as we look to rebuild the case for centre ground politics, we should take a bold step in writing the next chapter in the story of statutory minimum wages in the UK.
“A story which began under the Labour government of 1997 – but which took a giant step forward under the Conservative government in 2016 – so that we demonstrate once again that the well-regulated market delivers for all our people.”
He added that a gap has opened up in the UK and other developed countries between the “theory of how a market economy and free trade creates and distributes wealth and the reality experienced by many ordinary people.”
He warned, “We ignore that gap at our peril because if we do not address it, it will be filled with the reckless promises of the populists.
“But that doesn’t mean we should abandon our economic model.
“So, for those like me who believe passionately that harnessing the power of market economics is the only way to deliver progress… it is imperative that we take decisive action to show that the regulated market model can deliver higher wages and higher living standards.”
Speaking to BBC Radio 4’s Today Programme Hammond said, “If we do get to the point where Parliament does admit that it cannot resolve the situation, then it will have to be remitted back to the people.
“I am not sure that a general election can resolve the question for the simple reason that both the main political parties are divided on the issues.
“This is a division that runs not between the parties, but through the parties. We need a period of calm now before contemplating the possibility of a general election.
“My strong preference is for Parliament to resolve this but if Parliament can’t resolve it, then Parliament will have to decide how we remit it back to the people, whether it is in the form of a general election, or a referendum.”