Brexit Bulletin: ‘Put That Bawling Baby to Bed’

(Bloomberg) -- Today in Brexit: Boris Johnson’s leadership pitch is to “stop banging on about Brexit.”

What’s Happening?

Britain will have a new prime minister by the end of July, and the current favorite, Boris Johnson, says the country should “stop banging on about Brexit.”

Johnson laid out his pitch late on Tuesday to a group of centrist Conservatives, and warned them that the party could be wiped out if it can’t deliver Brexit this year.

“There is a very real choice between getting Brexit done and the potential extinction of this great party,” he told the meeting, where rivals Sajid Javid, Rory Stewart and Andrea Leadsom also spoke. The party needs to “stop banging on about Brexit and put that bawling baby to bed, pacify it and recapture the political agenda.”

Johnson also ruled out calling a general election and said he’d fight against a second referendum with “every fiber of my body,” according to excerpts released from his office. Still, he also made a comment, according to one of those present, that might come back to haunt him: If Brexit is further delayed beyond the current deadline of Oct. 31, then the “the relevance of the referendum starts to wane.” The plebiscite was in June 2016.

Johnson is in a rush to deliver Brexit and the Conservative Party is in a rush to get a new prime minister in office. The party changed its rules on Tuesday to speed up the process and quickly whittle down an unusually long list of candidates — 13 started the race. The process is laborious: First, Tory members of Parliament eliminate all but two candidates, then the final pair go to the party’s 120,000 grassroots members to pick the winner. Party managers promised on Tuesday that the whole thing would wrap up the week of July 22.

That leaves a window for the new prime minister to go to Brussels and try to restart negotiations before Europe heads to the beach. Many of the candidates are pledging to get a new deal for the Irish border. Get ready for Brexit: Season Two. It’s shaping up to look a lot like Season One.

Today’s Must-Reads

• Tory leadership candidates should beware the Nixon Trap, argues Daniel Finkelstein in the Times
• Trump wades into U.K. politics as May highlights rifts with the U.S.
• Trump’s path to a U.K. trade deal is strewn with roadblocks

Brexit in Brief

The NHS and ‘Everything’ | Trump made plain what many have long suspected: that any trade deal with the U.S. would include bits of the U.K. economy that Britons might not be too keen on putting on the block. The National Health Service, which is attractive because it’s a pharmaceuticals buyer as well as an administrator of hospitals and healthcare, would be part of any deal, Trump said — before later correcting himself. May pushed back in the press conference, followed swiftly by a clutch of leadership candidates.

Trump’s Favorites | Trump praised leadership candidates Johnson and Foreign Secretary Jeremy Hunt, and was due to meet Hunt during his trip. Johnson turned him down, saying he had to prepare for a campaign event. 

Fox Backs Hunt | Veteran euroskeptic Liam Fox, one of the most high-profile Brexiteers not to have resigned from May’s Cabinet, said he backs Hunt to be Conservative leader. Hunt is expected to put out a campaign video on Wednesday.

Governing On Hold | In another sign of the government grinding to a halt as a result of political turmoil, the Treasury hasn’t been able to set the revenue budget for next year, according to Liz Truss, economic secretary to the Treasury. Meanwhile, Wednesday is the deadline for candidates to apply to succeed Mark Carney as Bank of England Governor.

Splitters Split | Change U.K., the anti-Brexit party formed by members of Parliament who split from Theresa May’s Conservatives and Jeremy Corbyn’s Labour in protest at their Brexit strategies, has itself now split — just 106 days after it was formed.

Blame Game | A no-deal Brexit would cause chaos in equity markets and each side blames the other. Steven Maijoor, chairman of the European Securities and Markets Authority, said the fragmentation of markets across borders “is inherently related to the U.K.’s decision to leave the EU and the risk of a no-deal Brexit.”

Brexit Bonus | Brexit could be good news for banker bonuses in Ireland. The country’s central bank said on Tuesday that the Brexit-induced influx of finance firms to Dublin bolsters the case for allowing the return of some bonuses for bankers at institutions that were bailed out in the crisis. There’s a risk of losing staff in “critical functions or with specialist skills” to companies that don’t face the same restrictions, the central bank said.

Correction | In yesterday’s bulletin, we said the pound had fallen 4% in a week. It should have said in a month. 

Want to keep up with Brexit?

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--With assistance from Ian Wishart.

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

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