Boost for Johnson as Court Rules in His Favor: Brexit Update

(Bloomberg) --

As Brexit negotiations resumed in Brussels, Boris Johnson got a boost from the courts. A Scottish judge ruled in the prime minister’s favor in a case that could have forced him to obey a law requiring him to delay Brexit if he can’t reach a deal.

But the lift may only be short-lived. The judge ignored the prime minister’s frequent assertions he won’t seek an extension and instead relied on assurances from government lawyers that he would obey the law. That may make it harder for Johnson to leave without a deal on Oct. 31.

Key Developments:

• Johnson’s lead negotiator, David Frost, is in Brussels for talks with European Commission
• Talks will continue Tuesday
• Scottish judge rules in Johnson’s favor after pledges over Brexit delay
• When This $2 Trillion Market Turns, Start Worrying About Brexit
• Brexit Deal Prospects Fade as Talks Stall, EU Signals Pessimism

EU and U.K. Agree to Continue Negotiations (6 p.m.)

U.K. and EU negotiators have agreed to continue their talks on Tuesday. The U.K. produced extra legal text today, a spokesperson said in a statement, but its proposal hasn’t changed.

Johnson Calls EU Counterparts to Urge Shift (4 p.m.)

Boris Johnson spoke to his counterparts in Denmark, Sweden and Poland this afternoon, his office said. Brexit minister James Duddridge told Parliament the prime minister was trying to “whip up enthusiasm for the deal and avoid no-deal.”

Questioned over how the government would meet its apparently contradictory commitments to leave the EU by Oct. 31 and to abide by a law requiring it to seek a delay to Brexit if there isn’t a deal, Johnson’s spokesman James Slack told reporters: “The manner in which this is achieved is a matter for the government.” he gave no further details.

Government Won’t Publish Brexit Legal Text (3:45 p.m.)

Brexit Minister James Duddridge said the government won’t make public the full legal 44-page text of its latest proposals to the EU.

The full text “will only be published when doing so will assist with the negotiations,” Duddridge told MPs after being questioned about the issue in the House of Commons. “We’re not going to provide that legal text if it’s going to get in the way of negotiations and get in the way of a deal.”

Keir Starmer, Brexit spokesman for the opposition Labour Party, said both Irish Prime Minister Leo Varadkar and European Commission President Jean-Claude Junker had asked for the document to be published. “The only party insisting on secrecy is the U.K. Government,” he told lawmakers. “The question is obvious: What is the Government hiding?”

No Deal Trade Burden at 8 Billion Pounds (1:30 p.m.)

Businesses trading between the U.K. and European Union will face almost 8 billion pounds ($9.9 billion) of additional costs in a no-deal Brexit, according to new estimates by the U.K’s tax and customs authority HMRC.

Importers will pay a total of 3.8 billion pounds submitting the necessary customs declarations forms if the U.K. leaves the EU without a deal at the end of this month. Exporters’ costs will rise to 3.9 billion pounds, HMRC said.

The calculation shows the cost for one year and is based on 2017 trade flows. HMRC said it calculated that year’s EU-U.K. trade flows as if they were carried out with the U.K. outside the bloc.

Johnson Wins Scottish Challenge on Extension (12:55 p.m.)

A Scottish judge refused to put further obligations on Boris Johnson, saying his “unequivocal assurances” to seek an extension to the Brexit deadline were sufficient.

At a hearing in Edinburgh on Friday, Johnson’s lawyers promised he will obey a law that forces him to postpone Brexit. The claimants had argued that Johnson couldn’t be trusted and should be forced to comply with the legislation under threat of a fine or imprisonment.

“I am not persuaded that it is necessary for the court to grant the orders sought or any variant of them,” Judge Peter Cullen said while giving his ruling.

Jo Maugham, one of the challengers, said he will appeal the decision.

Johnson May Meet Varadkar As EU Seeks Progress (12:15 p.m.)

Boris Johnson may try to meet with Irish Prime Minister Leo Varadkar in the coming days as he seeks to show progress in Brexit talks, according to a U.K. official speaking on condition of anonymity.

The U.K. accepts both sides need to know where the proposals put forward by Johnson are heading by Friday, the person said. Both Varadkar and French President Emmanuel Macron signaled they want progress by the end of the week.

If insufficient progress is made, then Johnson’s plan may not even appear on the agenda for the Oct. 17-18 EU Council meeting, the person said.

Brexit Timeline

Time for EU to Compromise, U.K. Says (11:45 a.m.)

Boris Johnson wants the EU to engage fully with his proposals for the Irish border and it’s the bloc’s turn to compromise, the prime minister’s spokesman James Slack told reporters in London.

Reiterating that he won’t accept Northern Ireland being in a separate customs territory from the rest of the U.K., Slack said London has made compromises and expects Brussels to follow suit. He doubled-down on the premier’s pledge to leave with or without a deal on Oct. 31.

“We are ready to talk with the EU at a pace to secure a deal so that we can move on and build a new partnership between the U.K. and the EU, but if this is to be possible, the EU must match the compromises that the U.K. has made,” Slack told reporters. “The prime minister believes that we have set out a fair and sensible compromise.”

Johnson will call the leaders of Poland, Sweden and Denmark on Monday, Slack said.

EU Demands ‘Workable Solution’ (11:35 a.m.)

David Frost, the U.K.’s chief negotiator, is at the European Commission for Brexit talks today, commission spokeswoman Mina Andreeva said.

The negotiations this week are “to give the U.K. the opportunity to present their proposals in more detail and then we’ll take stock,” she said.

She added that the U.K. has to come up with “a workable solution now and not something based on untried and revocable arrangements.”

Scottish Ruling Expected at Noon (Earlier)

The latest Scottish court ruling related to Brexit is expected at noon Monday. Politicians are seeking a ruling that forces Prime Minister Boris Johnson to obey a law that requires him to seek an extension if he can’t reach a deal with the European Union.

Jolyon Maugham, a lawyer backing the case, said there are two elements to the ruling. First, will the court order Johnson to act as the law dictates, which would create the possibility of fines or even a jail term if he fails?

Second, is sending a letter requesting the extension -- which Johnson’s lawyers have promised to do -- enough to comply with the law. Or could the court look at other actions by Johnson that might be seen as undermining the law?

Earlier:

Brexit Deal Prospects Fade as Talks Stall, EU Signals Pessimism
When This $2 Trillion Market Turns, Start Worrying About Brexit

--With assistance from Edward Evans, Anthony Aarons, Ian Wishart, Alex Morales and Jessica Shankleman.

To contact the reporters on this story: Jonathan Browning in London at jbrowning9@bloomberg.net;Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Edward Evans, Thomas Penny

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