Gove Open to Extra EU Divorce Delay, Raab Opposed: Brexit Update

(Bloomberg) -- Britain will have a new prime minister by the end of July, with the first round of voting starting next week. The current favorite, Boris Johnson, says Conservatives have to stop “banging on about Brexit,” and that the party faces extinction if it doesn’t deliver the divorce, but the subject is dominating debates over who should be the next leader.

Key Developments:

• Tory leadership hopeful Michael Gove says he’s open to a further Brexit extension - but Dominic Raab rules one out
• Euroskeptic Steve Baker says he’d be willing to run for leadership if nominated
• Andrea Leadsom reiterates no-deal threat as contenders compete to succeed May
• Pound edges higher

Raab Won’t Rule Out Parliament Suspension (7:15 p.m.)

Former Brexit Secretary Dominic Raab wouldn’t rule out ending the current parliamentary session, which is known as prorogation, to force through a no-deal Brexit, Work and Pensions Secretary Amber Rudd said after a hustings meeting of Tory MPs.

Raab’s suggestion was met with silence in the room, according to Rudd. “I think it’s outrageous to consider proroguing parliament,” she said.

Foreign Secretary Jeremy Hunt also said he wouldn’t rule out proroguing parliament, but he didn’t think it would work, according to former minister Nicky Morgan. The last time the U.K. prorogued parliament for a long time -- in the 17th century -- the country ended up in civil war, Morgan said.

Hunt Insists He’s Not May’s Man in Tory Contest (7 p.m.)

Foreign Secretary Jeremy Hunt said his current role would help him deliver Brexit if he succeeds Theresa May as prime minister and insisted he’s “not Theresa in trousers,” former minister Nicky Morgan told reporters.

He refused to comment on delaying Brexit past October 31, saying the current deadline is too far in the future and he doesn’t want to go into details about his plans at this stage, according to Richard Graham, a supporter who was in the meeting of Tory MPs.

Hunt told lawmakers he had spoken to German Chancellor Angela Merkel, French President Emmanuel Macron and Dutch Prime Minister Mark Rutte about his ideas on Brexit at the D-Day commemorations, though wouldn’t reveal the contents of the discussions, Graham said.

Hunt said his record in business and government makes him well placed to strike a deal with the EU, according to another person in the room.

Raab Rules Out Extension Beyond Oct. 31 (6:30 p.m.)

Former Brexit Secretary Dominic Raab told Tory MPs he isn’t going to be boxed in by campaign promises in the fight to be next Tory leader and the only thing he’d rule out is an extension to the October 31 deadline for leaving the EU.

Education Minister Nadhim Zahawi said Rabb was also asked a lot about his attitudes to feminism at a hustings of MPs. Raab said he doesn’t believe in labels but spoke extensively about the things he has done to encourage gender equality, Zahawi told reporters.

Cross-Party Group Warns No-Deal Will Hurt Business (6 p.m.)

A cross-party group of lawmakers, representing 225 Members of Parliament who signed a letter opposing a no-deal Brexit, met with a “wide range of business organizations,’’ on Wednesday according to a statement from Labour’s Jack Dromey and former Conservative cabinet minister Caroline Spelman.

“Businesses are clear that the current uncertainty and continued threat of no deal is damaging growth and putting jobs at risk,’’ the MPs said. “Parliament must find a way to safeguard against a No Deal Brexit and restore confidence to business.”

The two MPs teamed up in January to successfully push through a vote ruling out a no-deal Brexit in the House of Commons. Spelman’s involvement serves as a warning to Tory leadership contenders who would countenance a no-deal Brexit, including the favorite, Boris Johnson, that not all in the party are prepared to go along with such a strategy.

Hancock: May Failed to Make Case For Business (5:50 p.m.)

Health Secretary Matt Hancock told Conservative MPs that the biggest failing of Prime Minister Theresa May’s government is not making the case for business. “That is the basis of a strong economy,’’ he told the hustings of so-called One Nation Conservatives on Wednesday, according to his office.

Making his case to succeed May as leader, Hancock -- who backed Remain in the EU referendum -- said "I want to slay this unicorn, that we need a Brexiteer as PM. We don’t need a Brexiteer as Prime Minister. We need someone who is committed to delivering Brexit."

Hancock said the party needs to ensure it chooses a leader fit for the next six years and beyond, and not just the next six months. He warned if they don’t they could usher in a socialist Labour government led by Jeremy Corbyn.

Gove Open to Another Short Brexit Extension (5:40 p.m.)

Environment Secretary Michael Gove, a contender to succeed Theresa May as prime minister, told a meeting of Tory MPs that he is open to a delay beyond the October 31 deadline for leaving the EU, according to two people in the room.

Gove, who also said he doesn’t rule out a no-deal divorce, said the government shouldn’t be wedded to the October date and should be flexible by days or weeks to allow time for an agreement with the bloc.

Gove, a leading figure in the Vote Leave campaign during the 2016 referendum, said he wants some movement on the Northern Ireland backstop to get Brexit done.

He also told a hustings event attended by 80 MPs who banged the tables in support, that if he is elected leader he would give the Conservative Parliamentary Party more power over policy making, including on Brexit.

May Meets Macron, Morrison, Trudeau (4:00 p.m.)

Theresa May discussed security challenges, Iran and Syria with French President Emmanuel Macron during a meeting at the D-Day commemorations in Portsmouth, her office said. She also updated Macron on Brexit developments since they last met at a dinner of European leaders last month, May’s spokeswoman Alison Donnelly told reporters in London.

May also met with Scott Morrison, prime minister of Australia, and Polish Prime Minister Mateusz Morawiecki, with whom she discussed EU citizens’ rights in Britain, Donnelly said.

The premier was also scheduled to meet Canadian Prime Minister Justin Trudeau.

Top Euroskeptic Baker Says He Could Run (1:45 p.m.)

Steve Baker, who led the Tory party’s pro-Brexit caucus during and after the 2016 referendum, said he is ready to run for the leadership -- if his colleagues want him to.

“If they ask me to do it and am I willing, my answer will be ‘You bet,”’ Baker said.

Baker Says Next Leader Must State Position (1:40 p.m.)

In a stuffy committee room in Parliament, Steve Baker, one of the Conservative Party’s leading Euroskeptics, called for the next leader to force a no-deal Brexit through -- whether Parliament agrees or not.

“This is not time to go round the House of Commons, or the Conservative Party, asking ‘what would you like?’’’ he said. “Put a stake in the ground and say ‘We’re going to do that, and you must come with me.’’’

One idea being floated in the contest -- though so far no candidate has adopted it -- is that Parliament should be “prorogued’’ or suspended past Oct. 31 to stop it from blocking a no-deal Brexit. But Baker insisted this wasn’t what he was talking about. Instead, he said the prime minister should call the bluff of those who say they’re willing to block no-deal.

“I don’t believe this House of Commons is ready for a general election,’’ he said. Baker also dismissed the idea that a new Brexit deal could be negotiated with the EU.

Stewart: No Hope of New Brexit Deal by Oct. 31 (1:15 p.m.)

Rory Stewart, an outsider in the contest to succeed Theresa May as prime minister, said rivals were showing a “lack of realism” by claiming they could get a new deal on Brexit with the European Union to allow the U.K. to leave the bloc on Oct. 31.

Former Foreign Secretary Boris Johnson is “saying that he’s going to go to Europe, and he’s going to negotiate a new deal before 31 October, and if he doesn’t get a new deal by 31 October he’s going to go no-deal,” Stewart told BBC radio. “Anyone who knows anything about Europe can assure you there is not the slightest hope of getting a new deal through Europe by 31 October.”

Stewart also said he has the required eight Tory MP supporters that will enable him to reach the second round of voting in the leadership contest, which officially starts on Friday.

Lidington: NHS Is Not ‘Up For Sale’ in US Talks (12:10 p.m.)

“When it comes to trade negotiations, the NHS is not and will not be up for sale,” May’s deputy, David Lidington told lawmakers in the House of Commons.

Labour’s business spokeswoman, Rebecca Long-Bailey, had challenged Lidington to provide a “yes or no” answer on whether the U.K.’s National Health Service will be included in U.S. trade talks after Brexit. The two politicians were deputizing for their party leaders at the weekly session of Prime Minister’s Questions.

U.S. President Donald Trump said in a press conference on Tuesday that “everything” was on the table, including the NHS, in trade talks, before backtracking in an ITV interview later in the day.

Boris May Not Save Tories, Election Expert Warns (11 a.m.)

Boris Johnson would face a huge challenge winning over enough voters to secure victory for the Conservatives, one of the party’s leading election experts said.

Johnson’s pitch to Conservative MPs is that he has the kind of public appeal that the party needs if it’s to succeed. But Rob Hayward, a member of the House of Lords who crunches polling data and voter statistics, told reporters Wednesday that voters have largely made their minds up about him, and too many don’t trust him.

“All the candidates need to understand what happened in the local elections,’’ Hayward said. “The Tories lost because they’d failed to deliver Brexit. But a large number of people who are not strong Remainers or Leavers are just looking for good government.’’

Hayward pointed to a poll showing that 23% of people who voted Conservative in 2017 rated Johnson as likely to be a “very bad’’ prime minister. “What’s striking about Boris in particular is that on a thing like ‘trustworthy,’ he comes out very badly,’’ he said.

McVey Says She Has Support to Stand (9:15 a.m.)

Esther McVey insisted she has sufficient support from Tory members of Parliament to stand in the party’s leadership contest. “I have the numbers,” she told LBC radio on Wednesday.

ConservativeHome, a Tory website, calculates that the arch-Brexiter only has the support of five MPs -- candidates need eight supporters to stand.

Hunt Says a New Deal Can Be Done (9 a.m.)

Foreign Secretary Jeremy Hunt published a leadership campaign video in which he says he would renegotiate the Brexit deal.

“There is a deal to be done if we approach this the right way,” he said. He compared the challenge to the London Olympics, saying he likes proving naysayers wrong.

He also reminded voters that he knows what it’s like to run a small business, and warned his party that if they get Brexit wrong, then a general election could follow, ushering socialist Labour leader Jeremy Corbyn into power.

Mordaunt Keeps Options Open (8:15 a.m.)

Defence Secretary Penny Mordaunt declined to rule herself out of the Tory leadership race, saying she doesn’t want to upstage veterans celebrating the 75th anniversary of the World War II D-Day landings. She has until Monday to declare under party rules.

Pro-Brexit Mordaunt hinted that if she did stand -- and win -- she would seek to renegotiate Britain’s Withdrawal Agreement with the European Union.

“What I would say is that in recent days, discussions I have had with people on the EU side of the negotiating table; I am really optimistic,’’ she told BBC radio. “I think they understand that they have to move on some things.’’

The EU has repeatedly said in public it won’t renegotiate the divorce deal, but it’s open to redrafting the non-binding political declaration on what future ties should be.

Leadsom Says No-Deal Must Be on Table (8:10 a.m.)

Andrea Leadsom, a Brexiteer who resigned from May’s Cabinet last month, reiterated her plan for a so-called managed no-deal exit.

She told ITV that the problem in the negotiation led by Prime Minister Theresa May was that “nobody believed we would actually leave without a deal.”

Still, she defended supporting May’s deal for so long, saying it was “legally Brexit” and she would “vote for it again.”

Coming Up:

• Prime Minister’s Questions at noon -- David Lidington stands in for May
• Hustings continue on Wednesday for leadership candidates, organized by the centrists of the One Nation Conservatives group

Earlier:

Boris Johnson Warns Tories of ‘Extinction’ If Brexit Is Delayed
Question of the Day: Are Markets Underpricing a Hard Brexit?
Stewart Swipes at Tory Rivals Johnson, Raab Over U.K. Tax Cuts

--With assistance from Tim Ross, Kitty Donaldson and Robert Hutton.

To contact the reporters on this story: Jessica Shankleman in London at jshankleman@bloomberg.net;Alex Morales in London at amorales2@bloomberg.net

To contact the editors responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Stuart Biggs, Thomas Penny

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