Photo Illustration: Tom Hall/Bloomberg


Brexit Bulletin: Boris Bowed

  • Foreign secretary pledges loyalty ahead of conference speech
  • U.K. offer on EU budget compromise dependent on trade deal

Sign up to receive the Brexit Bulletin in your inbox, and follow @Brexit on Twitter.

Boris Johnson has fallen into line, at least for now. 

After two weeks of defying Prime Minister Theresa May on Brexit, setting out his own red lines on what would be acceptable in a final deal, fellow Conservatives have made clear their exasperation with the perennial leadership candidate. That appears to have prompted something of a climbdown by Johnson at the party’s conference, where his traditional role has been entertainer-in-chief and darling of the grass roots.

“Contrary to some of the stuff that I notice has been knocking around in the media, you have a Cabinet that is totally united behind every comma, every full stop, every syllable of the Prime Minister’s excellent Florence speech,” Johnson told BBC Newsnight in Manchester on Monday.

His comments will bring some relief to May, who went into this year’s conference facing calls to fire her foreign secretary and stamp her authority on the Cabinet. She’s still fighting to keep her job, and to hold the party together after her failed election gamble in June. Concessions she made in Florence last month helped move Brussels negotiations along, but they made her position at home more precarious.

Still, we’ve been here before with Johnson. More clues as to his loyalty and leadership ambitions may be available later today when he speaks to the conference. He’s up at 3:40 p.m., after Trade Secretary Liam Fox and Brexit Secretary David Davis.

Meanwhile, it turns out that May’s Florence offer to keep paying into the EU budget for two years after leaving is conditional on getting a good trade deal, Bloomberg’s Tim Ross reports, citing U.K. officials who declined to be named. Furthermore, the U.K. hasn’t accepted that it is on the hook for a share of the pension liabilities accrued by the EU over the years to pay for officials’ and lawmakers’ retirement. 

Chancellor of the Exchequer Philip Hammond also qualified May’s call for a transition deal, which would run for two years after 2019, coinciding with those payments into the bloc’s budget. Transition is a “wasting asset,” he said, signaling that its value to the U.K. decreases the later in the process that it’s agreed. “Our European interlocutors know that,” he said. Business groups want Britain to “lock in” any transition arrangements by the end of the year.

U.K.'s Truss Sees a Transition and End Deal on Brexit

Brexit Latest

Two Transitions? | The prospect of a two-year transition may be dividing the Tory party, but Charles Grant, director of the Centre for European Reform, says that won’t be nearly enough to avoid a cliff-edge for business. Britain will need two transitions, he says: one where everything stays the same minus voting rights, and another, an implementation phase, once the new trading terms have been hashed out.

Dexit? | The Telegraph reports that Davis has told friends he will retire in 2019, leaving the transition to Johnson. Davis aides laughed off the story, Politico reports.

Brexit Heartland | Northeast England, one of the most pro-Brexit regions of the U.K., was the only part of the country to lose salaried jobs over the past year, according to the Office for National Statistics. The decline may help to explain why an area that has attracted foreign investors such as Nissan Motor Co. chose to quit the EU.

Office for National Statistics

Nuclear Brexit | Britain’s plans to spend billions of pounds on a fleet of new nuclear reactors could be stopped if skilled EU migrants face curbs on their rights to work in the U.K., says Rolls-Royce Holdings Plc and other nuclear energy experts at the party conference.

Strasbourg Vote | Members of the European Parliament, which wields a veto over the final Brexit deal, will vote today on a resolution setting out its recommendations for the mid-October leaders summit. It wants full freedom of movement to continue during any transition, and says not enough progress has been made on the divorce for talks to move on to trade, according to the draft published last week. The assembly’s negotiator Guy Verhofstadt gives a news conference at 12:30 p.m. in Brussels. 

Relocation Milestone | Sumitomo Mitsui Financial Group Inc. has signed a lease in Frankfurt, according to people familiar with the decision, making it one of the first foreign banks to commit to new office space in Germany’s financial capital ahead of Brexit.

On the Markets | The pound dropped against the dollar on Monday for the sixth time in the past seven days. Traders are watching the conference, unnerved by the internal struggles.

And Finally...

With the mood in Manchester subdued, all the passion on display has been at side events by politicians who don’t wield power in Westminster. Charismatic Scottish leader Ruth Davidson and pro-Brexit traditionalist Jacob Rees-Mogg have both played to packed sessions while ministers have struggled to get enough people through the door to eat the sandwiches. 

At the fringes, a sign of what many will hope is peak Moggmania: 24 year-old Tory supporter Ross Atkinson sporting a Moggmentum tattoo on his chest.

 “He is quite old fashioned, but at least he isn’t a Liberal Democrat in a blue tie,” said Atkinson, a pub chef who was queuing all afternoon to see his hero. “Theresa May just doesn’t come across as a proud Tory.”

For more on Brexit follow Bloomberg on Twitter, Facebook and Instagram

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE