May's Replacements Set Out Brexit Alternatives: Brexit Update

(Bloomberg) -- The candidates to succeed Theresa May as prime minister have been setting out their alternative Brexit strategies. Former U.K. Universities Minister Sam Gyimah is a surprise runner, pitching himself as the “second referendum” candidate. Meanwhile, preparing to visit Queen Elizabeth II on Monday, Donald Trump has urged Britain to go for a hard confrontation with the European Union.

Key Developments

• Environment Secretary Michael Gove is reported to be ready to delay Brexit until 2020
• Home Secretary Sajid Javid also didn’t rule out a further delay
• Trump said the U.K. should appoint Brexit Party leader Nigel Farage as its negotiator with the EU
• Health Secretary Matt Hancock and former Leader of the Commons Andrea Leadsom have set out their Brexit strategies

Javid Doesn’t Rule Out Further Brexit Extensions (11.15 a.m.)

Javid struggled to explain to the BBC what he would do at the end of October if the EU hadn’t agreed to his Brexit renegotiation. He said he’d prefer no deal to no Brexit, but pressed on whether he’d seek an extension, he said he wouldn’t want one, and couldn’t imagine asking for one, but didn’t rule out the possibility that he’d be compelled to. His plan is May’s deal, but with a technological solution to the Irish border problem. “What I would do is make a grand gesture to Ireland that we would cover all their costs -- the upfront costs, the running costs -- of a new digitized border,” he said. “I think it could be done in a couple of years but I think we could cover their costs.”

He also offered a strong hint that he opposes using Huawei technology in the U.K.’s 5G network, citing the Chinese government’s level of control of the company.

Leadsom Calls For ‘Managed Exit’ on Oct. 31 (10.45 a.m.)

Leadsom has been explaining her Brexit plan to the BBC. It involves a “managed exit” on Oct. 31. This involves junking the current Withdrawal Agreement, making preparations to leave the EU without a deal, and then presenting EU leaders with them and seeing what they’ll agree to. She would ask for sector-by-sector customs arrangements, but is determined to leave whatever happens. As this essentially represents a no-deal Brexit, it’s hard to see how this would pass parliament. Leadsom said she was sure that it would.

U.S. Ambassador Johnson: Move Slowly on Huawei (10.30 a.m.)

Woody Johnson, the U.S. ambassador to the U.K., has been on the BBC, preparing the ground for Trump’s visit. He insisted the president hadn’t been endorsing Boris Johnson as prime minister. He also reiterated his government’s concerns that the U.K. could use Huawei technology in its 5G network. “Move very slowly” in making a decision was his advice.

Gauke Backs Rory Stewart For Prime Minister (10 a.m.)

Another surprise from the Tory leadership contest as Justice Secretary David Gauke has thrown his weight behind International Development Secretary Rory Stewart -- though with a hint that he’d support Gove in later stages if Stewart was eliminated. Gauke acknowledged that Stewart, who is telling Tories that they have to accept the Brexit deal May negotiated, is an “underdog candidate.” Along with Gyimah’s run, the morning is seeing Tory opponents of a hard Brexit staging a small fightback.

Gyimah Announces Run For Prime Minister (9.30 a.m.)

Gyimah, who resigned as universities minister in opposition to Brexit, has become the 13th Conservative to announce a run to replace May as prime minister. He has a unique pitch, and one that is unlikely to win much support in the Conservative Party: Backing a second referendum. “There’s a wide range of candidates out there, but a very narrow range of views on Brexit being discussed,” he told Sky News. “While there’s a broad sweep of opinion in the country on how we move forward at this critical time, that is not being reflected in the contest at the moment.”

Overnight: Trump Backs Farage

Whether or not he endorses Boris Johnson as prime minister, Trump heaped praise on Brexit Party leader Farage. In an interview with the Sunday Times before he departs for a three-day visit to the U.K., the U.S. president suggested Britain refuse to pay the 39 billion-pound ($49 billion) settlement to cover commitments to the EU and walk away unless it gets “a fair deal.”

“I like Nigel a lot,” Trump said. “He has a lot to offer.”

Overnight: Tories Set Out Brexit Plans

Javid’s had five steps. Leadsom’s has three. Tory leadership candidates have been setting out their Brexit plans. Both involve leaving the EU on Oct. 31 come what may. Neither explains how they’d get that past Parliament.

Health Secretary Hancock’s Brexit plan (five steps) argues that no deal isn’t a realistic option, and focuses on finding solutions to the Irish border issue. He calls for Britain to accept the existing deal, leave the EU on Oct. 31, and if necessary enter an extended “implementation period” to solve the Irish problem. Sam Lowe, trade expert at the Centre For European Reform, described it on Twitter as “most coherent proposal I’ve seen so far from a leadership candidate.” He later added that this was “a relative statement.”

Gove hasn’t published his plan yet, but the Sunday Telegraph reports he’d be willing to delay Brexit until late 2020 rather than leave without a deal. His team isn’t disputing the report.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Cecile Gutscher, Amy Teibel

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