Johnson Appoints Morgan and Hart to His Cabinet: U.K. Politics

Alex Morales and Robert Hutton

(Bloomberg) -- Boris Johnson now has the power to enforce his vision for leaving the European Union and reshaping the U.K. economy, following the biggest win for his Conservative Party since Margaret Thatcher 32 years ago.

With its large majority, his government will no longer give Members of Parliament a vote on extending the Brexit transition period which expires on Dec. 31, 2020, according to a U.K. official.

On Monday, the premier announced that Nicky Morgan would be joining the House of Lords, the U.K.‘s unelected second chamber, and reappointed her as culture secretary. He also named Simon Hart as the new Welsh Secretary.

Key Developments:

Johnson welcomes 109 new Tory MPs to Parliament with a pledge to repay voters’ trust by getting Brexit doneGovernment to introduce Brexit bill to House of Commons on FridayLabour’s leadership race is hotting up. Read more: Life After Corbyn? The Politicians Vying to Become Labour Leader

Morgan Stays on As Culture Secretary (6.40 p.m.)

Boris Johnson re-appointed Nicky Morgan as Secretary of State for Culture, Media and Sport, even though she quit politics just before the election. Morgan will take up the role from a new position in the House of Lords, Parliament’s unelected upper chamber, according to a statement from the prime minister’s office.

Her resignation in October was seen a blow to Johnson’s team, but she continued to play an active role in the election campaign, appearing in broadcast interviews to defend the Conservative manifesto.

Her reappointment will provide the government with some continuity on key issues, particularly over the decision whether to restrict or ban Huawei Technologies Co Ltd telecom equipment in the U.K..

Probability of No-Deal Has Decreased: Carney (6:15 p.m.)

Boris Johnson’s victory in last week’s general election means the possibility of the U.K. crashing out of the European Union has subsided, according to Bank of England Governor Mark Carney.

“The worst-case scenario is effectively a no deal, disorderly Brexit. The probability of that scenario has gone down because of the election result and the intention of the new government,” Carney said, speaking in a press conference after the publication of the central bank’s Financial Stability Report. “The scenario itself and the risks that we protect the system against has not itself changed, it’s just become less likely.”

Read more: Probability of No-Deal Brexit Has Decreased, Carney Says

Hart Appointed Welsh Secretary (6.10 p.m)

Johnson made the first of three expected cabinet appointments, naming Simon Hart as replacement for Alun Cairns as Secretary of State for Wales. Cairns quit as the election got underway following reports he knew about a former aide’s role in the collapse of a rape trial.

The move represents a promotion for Hart, who was previously a minister in the Cabinet Office. He has represented the Welsh district of Camarthen West and South Pembrokeshire since 2010. Hart, who voted to stay in the EU in the 2016 referendum, was also chairman of the Brexit delivery group -- a coalition of politicians seeking a pragmatic deal-based solution to leaving the bloc.

Trump Congratulates Johnson, Discusses Trade (4 p.m.)

U.S. President Donald Trump and Boris Johnson discussed cooperation on security and trade issues by phone on Monday, including the “negotiation of an ambitious free trade agreement,” the prime minister’s office said in a statement. Trump also congratulated Johnson on his election victory, according to the statement.

Trump tweeted last week the U.K. and U.S. would be free to strike a “massive new trade deal” after Johnson’s victory.

MPs Won’t Get Chance to Extend Brexit Transition (12.30 p.m.)

The Withdrawal Agreement Bill that the government brings back to Parliament this week will no longer give politicians the power to ask the government to extend the U.K.’s transition period as it leaves the European Union, according to an official.

When ministers were trying to get support for the Brexit deal before the election, they agreed to give Members of Parliament a vote on whether a longer transition period would be needed. But the government now has a large majority -- and with every Conservative MP committed to backing the deal -- that concession is going away, the official said. Boris Johnson has repeatedly promised the period wouldn’t be extended beyond Dec. 31, 2020.

Fiscal Rules Under Pressure (12:15 p.m.)

New data show the challenge facing Prime Minister Boris Johnson to keep to his new fiscal rules. The Office for Budget Responsibility issued a restatement of its March forecasts to reflect changes incorporated into the public finances in September, primarily a new treatment of student loans. On this basis, total government borrowing is around 20 billion pounds ($27 billion) a year higher than previously stated.

Read more: U.K. Fiscal Rules Under Pressure as Billions Added to Deficit

Hostilities Break Out in Labour (12 p.m.)

Infighting has broken out in the Labour Party before a leadership contest is even properly underway, after defeated former MP Caroline Flint accused the party’s foreign affairs spokeswoman, Emily Thornberry, of calling voters “stupid.”

Flint told Sky News that pro-Europeans such as Thornberry and Brexit spokesman Keir Starmer would have no “credibility” as leader, and went on to say Thornberry “said to one of my colleagues ‘I’m glad my constituents aren’t as stupid as yours.”’

Thornberry denies making the remark, and told the BBC on Monday she’s taking legal action against Flint. “I would never even think that, let alone say it. It’s a complete lie,” she said. “I’ve said to Caroline, ‘come on Caroline, this isn’t true, you know, withdraw it and I’ll give you until the end of the day,’ and she refuses to. So I’ve had to go through all the hassle of instructing solicitors.”

Government to Introduce Brexit Bill on Friday (11:40 a.m.)

The government intends to introduce its Brexit bill to Parliament on Dec. 20, the prime minister’s spokesman, James Slack, told reporters in London. Boris Johnson built his election campaign around a pledge to “Get Brexit Done,” and with his sizeable majority in the House of Commons, securing a mandate to ratify the divorce deal with Brussels is not expected to be a problem.

The question is how far the government can go with the bill’s passage this week. Progressing to a second reading -- and a vote -- will require the backing of Speaker Lindsay Hoyle.

Separately, Slack said the government is pursuing a so-called Canada-style free-trade deal with the European Union, while planning in case no agreement can be reached is also continuing.

Factory Woe Puts Economy on Brink of Contraction (Earlier)

U.K. factories posted the weakest performance in more than seven years in December, increasing the chances that the economy will shrink in the fourth quarter, IHS Markit said. Manufacturing activity slipped to 47.4, a sharper downturn than the 49.2 reading predicted by economists and below the 50 mark that indicates stagnant output.

Read more: Factory Woe Puts U.K. Economy on Brink of Contraction, PMI Shows

Northern Irish Parties Strike Conciliatory Tone (Earlier)

The two main parties in Northern Ireland indicated a willingness to move forward after Boris Johnson’s office said restoring devolved government in the province is a priority, with talks set to resume before Christmas.

Sinn Fein Leader Mary Lou McDonald told BBC Radio that last week’s election had “changed things very dramatically,” because the Democratic Unionist Party no longer holds the balance of power in Westminster and can turn its attention back to Belfast. None of the issues up for debate are “red lines,” she said. “We are willing to deal and to close on these matters.”

DUP Leader Arlene Foster told the BBC she “always” enters the talks “in the spirit of looking to find accommodation, looking to find a way forward that recognizes that we are a divided society and one which just works for everybody.”

Earlier:

Johnson Picks Cabinet to Deliver Brexit After U.K. Election WinU.K. Post-Election Euphoria Justified, But Hard Work Starts NowLife After Corbyn? The Politicians Vying to Become Labour Leader

--With assistance from Kitty Donaldson, Jill Ward, Jessica Shankleman and Greg Ritchie.

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net;Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Andrew Atkinson

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