By Ben Blanchard
BEIJING (Reuters) - British finance minister Philip Hammond said on Friday that he was hopeful of clinching a Brexit compromise with the opposition Labour Party to allow the ratification of Prime Minister Theresa May's thrice-defeated divorce deal.
The United Kingdom was due to have left the EU on March 29, though May has been unable to get her divorce deal approved by parliament. It is now unclear when, how and even if Brexit will happen but the current deadline for leaving is Oct. 31.
May's government is trying to convince the Labour Party to back her deal but Labour wants to keep Britain in a customs union with the EU and has been discussing the idea of holding a confirmatory referendum on any deal they agree.
"I'm optimistic that we will find common ground," Hammond told Reuters in a pooled interview on the sidelines of a summit on China's Belt and Road initiative in Beijing.
"I had a very constructive meeting with my Labour counterpart literally just before I went to the airport and got on a plane to come here on Wednesday. And there are further meetings going on in London right now."
Hammond denied that talks with Labour had stalled.
"There is a national interest imperative that we find a way through which allows Parliament to agree to support a deal, which will allow us to deliver Brexit while protecting the British economy, British businesses and British jobs," he said.
British Foreign Secretary Jeremy Hunt said on Thursday he would opt to leave the EU without a deal if he was faced with a choice between a no-deal Brexit or not leaving the bloc at all.
Hammond said a no deal would hurt the British economy.
"If we were to have a no deal Brexit that would inflict serious short term turbulence on our economy and long term damage, reducing Britain's growth level and reducing the living standards of the British people. So I absolutely do not favor a no deal exit," he said.
"We need to leave with a deal and we've put the deal to Parliament three times now but unfortunately Parliament has not been able to agree that deal," Hammond said.
(Reporting by Ben Blanchard; Writing by Guy Faulconbridge editing by Darren Schuettler)
