Boris Johnson’s new law sets up potential no-deal Brexit

London — Boris Johnson will change the law to guarantee the Brexit transition phase is not extended, setting up a new cliff-edge for a no-deal split with the EU at the end of 2020. The pound fell as much as 0.7% on the news.

The UK prime minister wants to deliver his election promise to ratify a new free-trade agreement with the bloc before the bridging period maintaining the status quo runs out on December 31 2020.

EU leaders have warned that it’s highly unlikely that negotiators will be able to complete the kind of deal Johnson wants, which he’s modeled on Canada’s agreement with the EU, in the 11 months between the scheduled Brexit day of January 31 and the December deadline. The EU-Canada deal took seven years to finalise.

Johnson’s gambit is the latest sign of intent as he seeks to force through Britain’s divorce from the 28-nation bloc without further delay. After winning a big majority in last week’s general election, the prime minister now has the power to do as he pleases on Brexit, without fear that parliament will thwart his plans.

He’ll start by putting the divorce part of the Brexit deal to a vote, potentially as soon as Friday. Once MPs have ratified that, the UK will leave the EU by January 31.

The planned legislation will include legal text to prevent the government extending the transition period and delaying the day Britain stops being subject to EU laws, even if no new trade terms have been secured in time, an official said.

Deadlines and continuity

The law will potentially force the UK out of the EU without a new deal in place, threatening tariffs and disruption to trade.

As well as ministers being blocked from extending the transition period, the House of Commons will not get a vote on the issue, another official said.

When ministers were trying to get support for the Brexit deal before the election, they agreed to give MPs a vote on whether a longer transition period would be needed, but the government’s new majority means such compromises aren’t necessary, the official said.

Other concessions granted to try to smooth Johnson’s deal through parliament in October, including protections for workers rights and a promise to give MPs a say over talks with the EU, will also be scrapped, the Times newspaper reported, without saying where it got the information.

Johnson’s plan to give priority to delivering Brexit was also reflected in appointments to his cabinet, announced on Monday evening, which puts the emphasis on continuity as he seeks to minimise disruption before the January 31 deadline.

Nicky Morgan, who had announced she was standing down as an MP before the election, has been handed a seat in the unelected House of Lords so she can stay on as culture secretary. In the only other senior appointment on Monday evening, Simon Hart became Welsh Secretary in a move forced on Johnson after the resignation of Alun Cairns from the post in November.

Other key positions in the cabinet, including the key posts of chancellor of the exchequer, home secretary and foreign secretary, are expected to remain unchanged.

As well as providing stability in the run-up to Brexit, Johnson, who plans a wider reshuffle of his top team after the deadline at the end of January, will have Morgan by his side to advise on the role of China’s Huawei Technologies in UK telecoms, a thorny issue as Britain seeks trade deals with the rest of the world after leaving the EU.

Bloomberg