UK’s Johnson seeks to rule out Brexit trade pact delay

Boris Johnson.
Photo: UK Government

LONDON—Buoyed by a Conservative majority in Parliament, British Prime Minister Boris Johnson signalled Tuesday he won’t soften his Brexit stance, ruling out any extension of an end-of-2020 deadline to strike a trade deal with the European Union.

Johnson’s office said the government would insert a clause into its Withdrawal Agreement Bill—which ratifies the country’s departure from the EU—to rule out extending Britain’s trade negotiations with the EU beyond next year. That could mean Britain leaving without a deal on trade terms at the start of 2021, a prospect that alarms many U.K. businesses.

The pound plunged on the news, falling 1% to less than $1.32.

Johnson’s Conservatives won an 80-strong majority in Parliament in last week’s general election—the most decisive Tory victory since the 1980s—as voters in formerly Labour-backing areas rallied to Johnson’s promise to “get Brexit done.”

The majority gives Johnson the ability to overcome opposition to his Brexit plans and implement his legislative agenda—unlike his Conservative predecessor Theresa May, who led a minority administration and failed to win lawmakers’ backing for her Brexit blueprint.

Chairing his first post-election Cabinet meeting on Tuesday, Johnson called the election result “seismic” and said his Conservative government would “work flat out” to repay voters’ trust.

U.K. lawmakers were meeting in Parliament on Tuesday for the first time since the election, to begin swearing in scores of newly elected legislators. The Brexit bill is due to get its first vote in the House of Commons on Friday.

The Brexit divorce bill will see the U.K. leave the 28-nation bloc on Jan. 31 and enter a transition period until the end of 2020 while a new trade deal with the EU is being negotiated. During the transition period, Britain will effectively remain member of the EU, though without voting rights.

The withdrawal agreement allows for the transition to be extended until the end of 2022. Johnson has said repeatedly he won’t use the extra time, although trade experts say striking a new deal in only 11 months will be challenging.

Inserting a legal clause into domestic law ruling out a trade extension would underscore Johnson’s commitment to leave the EU in full by the end of next year, though it would not prevent his government from changing its mind later.

Opposition politicians said the move would cause more uncertainty for businesses, who are still unsure what Britain’s trade relationship with the EU will be, three-and-a-half years after the U.K. voted to leave the bloc.

“This Tory government’s reckless approach to Brexit will send the country straight off the no-deal cliff,” said acting Liberal Democrat leader Ed Davey. “The only way Johnson can meet the December 2020 timetable is by giving up all his previous promises to Leave voters and agreeing to all the demands of the EU.”

Sam Lowe of the Center for European Reform, a think-tank , said Johnson likely believed that a “firm deadline” would help speed up trade talks with the EU. But he told the BBC that the British government “could easily introduce a later bill saying `actually we could extend it.”’

“It’s a firmer deadline, but of course there is still some flexibility,” Lowe said.