Brexit Bulletin: Thwarting Johnson

(Bloomberg) -- Today in Brexit: As Boris Johnson closes in on becoming prime minister, his opponents are lining up to thwart him.

What’s Happening?

Britain gets a new prime minister this week, and the likely winner is set to take office with his most important policy in doubt.

At least two ministers are timing their resignations to undermine the new prime minister — if, as expected, it is front-runner Boris Johnson. Chancellor of the Exchequer Philip Hammond said he would quit on Wednesday, as he can’t accept Johnson’s pledge to leave the European Union on Oct. 31 with or without a deal to mitigate the economic damage Brexit is expected to bring.

Hammond is emerging as a key figure among backbench Conservatives plotting to prevent a chaotic departure, and on Friday he appeared not to rule out bringing down the next government if that’s the only way to stop it.

Justice Secretary David Gauke told the Sunday Times he would also tender his resignation to Prime Minister Theresa May on Wednesday, and as many as six Conservative members of Parliament are expected to have talks with the pro-EU opposition Liberal Democrats this week. Labour’s Brexit spokesman, Keir Starmer, called over the weekend for rebel Tories to work “in the national interest” to block Johnson.

Johnson’s pitch is that he can unite the Conservative Party and the country, but he takes office with a growing group of rebels within his own party trying to thwart his plan for Brexit. Parliament voted last week to prevent the next prime minister from sending lawmakers home in order to push through a no-deal exit against their will. It was widely seen as Johnson’s first parliamentary defeat.

A vote of no-confidence in the new prime minister is probably unlikely this week — Labour leaders can’t be sure they would win it. The standoff with Iran might even distract attention from the deep divisions in the party over Brexit in the first few days of the new government. But when members of Parliament come back to work in September, it’s an open question whether Johnson will have any majority at all.

Today’s Must-Reads

• EU puppet-master exits, leaving behind enemies and intrigue.
• Who will be Britain's next chancellor of the exchequer? Take a look at the main rivals for the job. 
• Johnson says Britain needs the “can-do” spirit of the U.S. , the one that put a man on the moon, to solve the problem of the Irish border after Brexit. After all, former Brexit Secretary David Davis said in 2017 that preparing for the divorce made the “NASA moon shot look quite simple.”

Brexit in Brief

Fighting in the Courts | A cross-party group led by Scottish and Welsh lawmakers will try this week to get Scottish courts to prevent the next prime minister from suspending Parliament, according to Scottish National Party member Joanna Cherry. It’s one of several lawsuits that could be in the pipeline to block a no-deal Brexit. 

Stranded Lawyers | U.K. lawyers with lucrative careers in EU law are fighting to save their jobs after the bloc’s top courts warned that a no-deal Brexit would forbid them from representing clients there.

Reputational ‘Dent’ | The Confederation of British Industry called on the next prime minister to restore economic confidence and spur investment. “The reputation of our country has taken a dent in recent times,” CBI Director-General Carolyn Fairbairn said.

On the Markets | Whoever wins the leadership race, investors reckon U.K. markets will lose. Already a quarter of global investors are underweight U.K. equities, making it the most-disliked region for 41 consecutive months, according to a Bank of America Corp. fund survey, while the pound is the second most-undervalued among the Group-of-10. The pound traded at $1.2501 early this morning.

Trump Jumps the Gun | Donald Trump said Johnson will do a “great job,”  even though he hasn’t been elected yet. “I spoke to him yesterday, I think he’s going to do a great job, I think we’re going to have a great relationship,” he told reporters on Friday. “I think the previous prime minister has done a very bad job with Brexit — what can I say, it’s a disaster. It shouldn’t be that way. I think Boris will straighten it out.”

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha

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