EU Rejects Johnson's Bid to Reopen Divorce Deal: Brexit Update
Boris Johnson said he would “turbo-charge” preparations for a no-deal divorce as he set out his priorities for government.
(Bloomberg) -- The EU rejected Boris Johnson’s demand that the Irish border backstop should be scrapped after the U.K. prime minister stressed his “absolute commitment” to leaving the bloc on Oct. 31. Johnson, who hopes Brussels will rethink its refusal to renegotiate the Brexit deal struck by Theresa May, was also told that is impossible.
Key Developments:
- EU Chief Negotiator Michel Barnier rejected as “unacceptable” Boris Johnson’s demand that the Irish border backstop should be scrapped as the price for an exit deal
- Johnson spoke to European Commission President Jean-Claude Juncker
- In statement to Parliament, new premier promised more cash for no-deal preparations
- Johnson also hinted he has an eye on an early election
- Must Read: Welcome to Number 10, Boris Johnson. You Have Some Work to Do
Brexit-Backer Baker Turns Down Government Job (8:10 p.m.)
Steve Baker, deputy chairman of the pro-Brexit European Research Group, has turned down a job in Boris Johnson’s government (see 10:45 a.m.).
Commenting on Twitter, he said he didn’t want to repeat his experience of “powerlessness” as a junior minister in the Department for Exiting the European Union, with the bulk of the Brexit work being done in the Cabinet Office.
In a pointed warning to Johnson, Baker said “disaster awaits” if he doesn’t take Britain out of the EU by Oct. 31.
Johnson to Juncker: Withdrawal Deal Must Change (6:30 p.m.)
Boris Johnson told EU Commission President Jean-Claude Juncker that the withdrawal agreement must change if he is to stand a chance of getting it through parliament, according to his office’s account of the phone conversation between the two men (see 5:55 p.m.).
“The prime minister reiterated that he wants a deal, and will be energetic in pursuit of finding a way forward, but said the Withdrawal Agreement has been rejected three times by the U.K. Parliament and will not pass in its current form,” the readout said.
“The prime minister said that if an agreement is to be reached it must be understood that the way to a deal goes by way of the abolition of the backstop.”
Juncker to Johnson: No Changes to Divorce Deal (5:55 p.m.)
European Commission President Jean-Claude Juncker told Boris Johnson the Withdrawal Agreement is the “best and only agreement possible,” the Press Association cited a commission spokeswoman as saying.
The commission is available for talks with the U.K. over the coming weeks and to analyzing ideas from the British government for the political declaration -- the non-binding part of the deal referring to future ties -- the spokeswoman said, “providing they are compatible with the Withdrawal Agreement.”
Johnson and Juncker exchanged phone numbers and agreed to stay in touch, according to the report.
Johnson to Speak to EU’s Juncker (4.05 p.m.)
Boris Johnson will speak to European Commission President Jean-Claude Juncker by phone on Thursday afternoon, his office said.
Commenting on Michel Barnier’s response to Johnson’s speech (see 3:15 p.m.), Prime Minister’s Spokesman James Slack said the U.K.’s new strategy is at a very early stage.
“It’s day one,” Slack told reporters. “The prime minister has said that he wants a deal and he’s going to be energetic in the pursuit of that, but it’s a matter of fact that the deal has been rejected three times.”
Barnier: U.K. Backstop Demands ‘Unacceptable’ (3:15 p.m.)
Chief EU Brexit Negotiator Michel Barnier sent a strongly worded email to European diplomats on Thursday, referring to Boris Johnson’s appearance in the House of Commons as “combative” and saying the demand to eliminate the Irish border backstop is “unacceptable.”
Johnson’s focus on no-deal preparations is partly intended “to heap pressure on the unity of the EU27,” Barnier wrote in an email seen by Bloomberg. The EU must prepare for all scenarios, he said.
Barnier also hinted at the prospect of a snap election in the U.K.: “I note also the many strong reactions to the speech in the House of Commons,” he said in his message. “In this context we must follow carefully the further political and economic reactions and developments in the U.K.”
Varadkar Doesn’t Know if Johnson’s Bluffing (3 p.m.)
Irish Prime Minister Leo Varadkar said it isn’t clear to him if Boris Johnson is serious about his threat to quit the European Union at the end of October “come what may,” but the EU and Ireland’s position on the border backstop remains unchanged.
“Without the backstop there is no withdrawal agreement,” Varadkar said. “There’s no transition phase, there’s no implementation phase and there’ll be no free trade agreement until all those matters are resolved. I hope the new U.K. prime minster hasn’t chosen no-deal, but that will be up to them.”
EU ‘Working Assumption’ is Oct. 31 Brexit (2:50 p.m.)
The EU’s “working assumption” is that the U.K. will leave the bloc on Oct. 31 and it “should happen in an orderly way,” European Commission spokeswoman Mina Andreeva said in response to Johnson’s statement to Parliament.
The bloc is continuing its preparations for a no-deal Brexit, Andreeva said. While splitting without an agreement would cause serious disruption and have big economic consequences, they would be “proportionately much greater for the U.K.,” she told reporters.
The Commission “takes note” of Johnson’s decision not to nominate a Commissioner, Andreeva said, and pointed out that under EU law “the Commission is composed of one Commissioner from each member state.” As long as the U.K. is a member state, “it has all the rights and all the obligations of a member state,” she said.
Tory Costa Warns Johnson on EU Citizens’ Rights (2:30 p.m.)
Alberto Costa, a Conservative MP who has been campaigning to secure the rights of EU citizens living in the U.K., said that while Johnson’s assurances were “welcome,” he wanted to see a law passed to give citizens a guarantee -- something Johnson hasn’t promised.
“The devil is in the detail,” Costa told the BBC. The current program, he said, “is not a guarantee -- it’s not been enshrined in law.” Costa orchestrated a Tory rebellion leading to a parliamentary defeat for May over the issue earlier this year.
Johnson Wants EU to Rethink Renegotiation Refusal (1:20 p.m.)
Boris Johnson hopes the EU will rethink its refusal to renegotiate the withdrawal agreement, his spokesman James Slack told reporters in London.
Johnson, who spoke with Dutch Prime Minister Mark Rutte on Thursday, will be approaching talks with the bloc with “energy and enthusiasm” and will act as the U.K.’s chief negotiator, Slack said. Brexit Secretary Stephen Barclay will be counterpart to the EU’s lead negotiator Michel Barnier in talks.
Johnson will launch a publicity campaign to increase awareness of the need for No-Deal preparations.
Johnson Rules-Out Another ‘Toxic’ Referendum (12:50 p.m.)
Johnson ruled-out a second referendum, saying that holding another on Brexit would open up the possibility of another in Scotland, which might lead to the break up of the United Kingdom.
Describing referendums as “deeply divisive and toxic” events, he said they should only take place “once in a generation,” and “having a second referendum would be catastrophic for our union.”
“How could we not have another referendum in Scotland if we have one on Brexit?” he asked. “It’s simply the wrong thing to do.”
Johnson Won’t Guarantee No-Deal Commons Vote (12:35 p.m.)
Asked by Tory defector Anna Soubry whether he’d allow Parliament to have a say on the next steps if he fails to secure a new deal on Brexit, Johnson refused to provide the yes or no answer she requested.
“This parliament has already voted several times to honor the mandate of the people to come out of the EU, and that is what we should do.,” Johnson said.
The reply won’t dispel fears among opponents of a no-deal Brexit that Johnson may attempt to bypass the House of Commons if he can’t agree a new deal with the EU.
Letwin Offers Support For A Brexit Deal (12:30 p.m.)
Oliver Letwin, one of the former Conservative ministers who have been doing their best to block a no-deal Brexit, reminded Johnson that he and many of his co-conspirators are ready to vote to leave the EU with an agreement.
“There lies within this House I believe still a possible majority in favor of almost any sensible arrangement,” Letwin said. Johnson was warm in response: “I share his desire not to get to a no-deal outcome.”
DUP’s Dodds Praises Johnson’s Optimism (12:20 p.m.)
Nigel Dodds, Westminster leader of the Democratic Unionist Party, welcomed Johnson’s “positivity, his optimism” and urged him to “strain every sinew” to both deliver Brexit and restore devolved government to Northern Ireland.
The relationship with the DUP is critical for Johnson’s Conservatives because their Parliamentary majority depends on the Northern Irish Party. Dodds pointed to this, with a suggestion DUP support isn’t guaranteed: “We look forward to further conversations in the coming weeks to ensure that we can have a sustainable Conservative and Unionist government going forward,” he said.
That may involve spending commitments to Northern Ireland as well as delivering Brexit.
Johnson Drops Another Election Hint (12:15 p.m.)
Boris Johnson, answering a question from Scottish National Party leader Ian Blackford, dropped another hint that his mind is on an election. “If we can deliver a fantastic and a sensible and a progressive Brexit, which I believe we can, and the whole U.K. comes out as I know that it will, what happens then to the arguments of the SNP?” he asked.
He then suggested that if the SNP campaigned for an independent Scotland to re-enter the EU, it would be signing up to joining the Euro and giving up control of its fishing grounds.
“That is not the basis on which to seek election in Scotland,” Johnson said. “We will win on a manifesto for the whole U.K.”
The entire exchange suggests Johnson’s preferred option is to hold an election after delivering a successful Brexit. But talk of election manifestos suggests the direction of his thinking.
Johnson Bombards Corbyn to Tory Delight (12:10 p.m.)
The new Tory leader’s first appearance in the House of Commons as prime minister showed why the party picked him: to take on Jeremy Corbyn’s Labour with gusto.
Johnson savaged the opposition leader and his finance spokesman John McDonnell in the kind of ferocious attack Theresa May never delivered in her three years in power.
He said Corbyn had flip-flopped on Brexit and was now “a Remainer” and provoked McDonnell to rise from his seat, wave him away and pour himself a glass of water from the table in the middle of the Commons chamber.
Tory MPs loved it, roaring their approval as Johnson finished his verbal assault, claiming he now led the real “people’s party.”
NHS is ‘Not For Sale,’ Johnson Says (12 p.m.)
In answer to a question from Jeremy Corbyn about a future trade deal with the U.S., Johnson ruled out including the state-funded National Health Service. “It’s not for sale,” he told MPs.
Corbyn Criticizes Johnson’s Trump Links (11:55 a.m.)
Opposition Labour Party Leader Jeremy Corbyn attacked Johnson for his links to Donald Trump, using the U.S. President’s own words to call the new premier “Britain Trump.” He urged Johnson to rule out including the U.K.’s National Health Service in any trade deal with the U.S.
Other criticisms surrounded the support for the death penalty expressed by the new home secretary, Priti Patel, and Johnson’s infamous “f*** business” remark to a European ambassador. On Brexit, Corbyn said if Johnson is confident in his plan, he should put it to a public vote.
“Labour will oppose any deal that fails to protect jobs, workers’ rights or environmental protections,” Corbyn said. ”And if he has the confidence to put that decision back to the people, we will campaign to Remain,” Corbyn added, reiterating the current Labour line on a second referendum.
Johnson: National Spirit Makes No-Deal Possible (11:50 a.m.)
Boris Johnson sought to establish the idea that preparing for a no-deal Brexit should be a national effort to reduce disruption. “I believe that is possible with the kind of national effort that the British people have made before and will make again,” he said.
Although he didn’t specify when the British people had made such efforts before, many on the Tory benches will have taken it as an invocation of World War II, a key historical moment for many backers of Brexit.
Johnson Calls for Turbo-Charged No-Deal Plans (11:45 a.m.)
Johnson said he has instructed his Cabinet to ramp up preparations for leaving the European Union, telling the House of Commons he’s instructed Chancellor of the Exchequer Sajid Javid to make available “all necessary funding.”
Michael Gove, who runs machinery of government, will make no-deal preparedness his “top priority,” Johnson said.
“In the 98 days that remain to us, we must turbo-charge our preparations to make sure that there is as little disruption as possible to our national life,” Johnson said.
Arms Waving, Johnson Rallies Tories (11:40 a.m.)
Johnson’s arrival was greeted in the Commons by cheers from his own side. His style could not be more different from Theresa May’s.
At the dispatch box, he waved his arms for emphasis, pausing his statement during the key passage on Brexit for effect.
On the government front bench behind him, sat Johnson’s new Cabinet. Home Secretary Priti Patel and Chancellor of the Exchequer Sajid Javid were in prominent places.
Johnson Says ‘Mission’ is to Leave EU on Oct. 31 (11:35 a.m.)
Boris Johnson said his government’s mission is to deliver Brexit by Oct. 31 and described the deal struck by Theresa May as “unacceptable to this Parliament and this country.”
“I would prefer us to leave the EU with a deal, I believe it is possible even at this late stage,” Johnson said. He said he and his team are ready to meet and talk with EU negotiators “wherever and whenever,”
The Irish backstop must be removed from the U.K. Withdrawal Agreement with the EU and everyone in the cabinet is committed to leaving on Oct. 31 “whatever the circumstances,” Johnson said.
Britain will “throw itself” into negotiations and “turbo-charge” preparations for a no-deal divorce, Johnson said. He said the 39 billion pounds would be available for the work.
Johnson Will Address No-Deal Planning (11:10 a.m.)
Boris Johnson will address preparations for a no-deal split from the EU when he addresses Parliament later, Leader of the House Jacob Rees-Mogg told the House of Commons.
“It’s jolly good news we’ve got an administration that’s committed to leaving the European Union,” Rees-Mogg said in answer to an MP’s question about no-deal planning. “Preparedness is of great importance, I think he might find there are some encouraging words coming from the prime minister a bit later.”
Rees-Mogg: MPs Voted to Leave EU by Oct. 31 (10:53 a.m.)
Jacob Rees-Mogg, the new leader of the House, argued Parliament has already given its approval to leaving the EU on Oct. 31, regardless of whether a deal has been reached with the EU. MPs have already passed laws putting the Brexit process in motion, he said.
“With relation to leaving the European Union, this Parliament voted for the Withdrawal Act and said we would leave,” he said. “Parliament debated, Parliament decided, parliamentary democracy requires we deliver.”
Brexiteer Baker Eyes Treasury Committee Chair (10.45 a.m.)
Boris Johnson hasn’t so far found a job for Steve Baker, the deputy chairman of the pro-Brexit European Research Group and a man who coordinated opposition to Theresa May’s deal. Baker was an early backer of Johnson, giving him the Brexiteer stamp of approval.
Baker may yet be appointed to a non-Cabinet ministerial position, but if he’s not, what would he like to do instead? This morning he said in a brief interview that he has his eye on the chairmanship of Parliament’s Treasury Committee, vacant now Nicky Morgan has become Culture Secretary.
It’s one of Parliament’s most powerful committees, and would be a good pulpit from which Baker would be able to make life difficult for the government. And not just on Brexit. “It would allow me to pursue my other interest -- monetary policy reform,” he said. Baker is an advocate of ending the days of fiat money creation.
Rees-Mogg Doesn’t Rule Out Prorogation (10:45 a.m.)
Jacob Rees- Mogg, the new leader of the House of Commons didn’t rule out suspending Parliament to force through Brexit.
Asked about it in his weekly question and answer session, he told MPs: “The prime minister has said he views prorogation as an archaic mechanism and he doesn’t wish to see archaic mechanisms used. As I’m now bound by collective responsibility that’s now my view.”
Swinson Urges Corbyn to Call No-Confidence Vote (10:05 a.m.)
Jo Swinson, the newly elected leader of the Liberal Democrats, has written to Labour leader Jeremy Corbyn urging him to call a vote of no-confidence in Boris Johnson’s new government.
“Boris Johnson does not hold a mandate from Parliament or the general public to be Prime Minister,” Swinson wrote. “His reckless refusal to rule out proroguing Parliament in order to crash the U.K. out of the EU without a deal demonstrates that he is not fit to lead this country.”
She points out that Corbyn, as leader of the official opposition, is the only person in a position to call such a vote. “You must not sit back and allow this government to crash our country out of the EU,” she wrote.
Labour has so far resisted calls for a no-confidence vote, saying the party will do so only when there is a good chance of success.
Sunak: Govt Could Use EU Payment for Economy (8:45 a.m.)
Chief Secretary to the Treasury Rishi Sunak suggested the government could spend the 39 billion-pound ($49 billion) financial settlement to stimulate the economy -- depending on the outcome of negotiations with the European Union.
“That will no doubt be a discussion for the future but the point is we won’t be writing a check on day one for 39 billion pounds,” Sunak told BBC Radio.
It’s a position that risks angering the bloc because the agreed sum is a settlement of past and current liabilities -- with a portion owed for ongoing projects. The bloc has repeatedly said the payment is a key component of the divorce settlement and not related to any future trade deal.
Also asked how he expects the EU to respond to the tougher line taken by Johnson, Sunak predicted the bloc would negotiate. “They said they would never give us an extension until we passed the withdrawal agreement -- they didn’t just give us one, they gave us a couple,” he said.
There’s No Time For Doubt: Duncan Smith (7:50 a.m.)
Former Tory leader Iain Duncan Smith, who was chairman of Johnson’s leadership campaign, said there’s not enough time before the new prime minister’s Oct. 31 Brexit deadline for there to be doubters in cabinet.
“If you’ve got 100 days, you cannot have people who say ‘you know what, I’m not sure about this,’” Duncan Smith told BBC Radio 4.
He said Amber Rudd and Nicky Morgan, regarded as more moderate voices on Brexit, will be able to have their say in cabinet discussions, contradicting Nick Boles’s claim (see 7:35 a.m.) that they will be “neutered.”
Boles: New Cabinet Shows Hard Right Takeover (7:35 a.m.)
Nick Boles, who sits in the House of Commons as an independent after quitting the Tory Party over the inflexibility of hardline Brexiteers, said Johnson’s reshuffle shows that the party has been taken over.
“It’s very clarifying because what it establishes beyond all doubt is that the Conservative Party has been taken over top to bottom by the hard right,” Boles told BBC radio. “They’re turning themselves into the Brexit Party in order to hold off Nigel Farage.”
“These are not normal center ground pragmatic politicians, these are ideologically motivated people from the hard right,” Boles said.
Boles, who voted three times for Theresa May’s deal with the EU, said Nicky Morgan and Amber Rudd, who had previously opposed a no-deal split with the bloc, are “neutered captives” in the new cabinet. They have had to agree to be open to leaving without an agreement -- and the damage that could cause to the U.K. economy -- to get their jobs, he said.
Earlier:
--With assistance from Thomas Penny, Peter Flanagan, Alex Morales, Tim Ross and Joe Mayes.
To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net;Kitty Donaldson in London at kdonaldson1@bloomberg.net
To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Thomas Penny, Stuart Biggs
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