Johnson Ramps Up Race for PM; Vows to Hold EU Payment: Times

James Ludden
Johnson Ramps Up Race for PM; Vows to Hold EU Payment: Times

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Boris Johnson ramped up his campaign to become Britain’s next prime minister, vowing to take the country out of the European Union with or without a deal on Oct. 31 and promising to hold onto money owed to the bloc until terms of the divorce become more favorable to the U.K.

In an interview with the Sunday Times, Johnson promised a “One Nation Tory agenda” that he hopes would encourage voters to reject Jeremy Corbyn’s opposition Labour Party and Nigel Farage’s Brexit Party -- both of which savaged the Conservatives in the recent European parliamentary elections.

His comments come a day before Monday’s formal deadline for the nomination of Tory leader candidates. Whoever becomes party leader will get the keys to 10 Downing Street.

Johnson, the bookmakers’ favorite, got an overnight boost with the backing of self-dubbed “Brexit Hardman” Steve Baker, who led the Tory party’s pro-Brexit caucus during and after the 2016 referendum.

In his interview, Johnson said he’d change the team negotiating Brexit in Brussels, guarantee the rights of the 3.2 million EU citizens living in the U.K. and step up preparations for a no-deal departure and get the country ready for what he called “disruption.”

But Johnson’s plan to refuse, for now, to hand over the 39 billion-pound ($50 billion) divorce payment to Brussels was the newspaper’s big splash headline. The EU has repeatedly refused to renegotiate the withdrawal agreement.

“I always thought it was extraordinary that we should agree to write that entire cheque before having a final deal,” he said. “In getting a good deal, money is a great solvent and a great lubricant.”

Bar Bill

Britain is technically required to pay to quit the bloc. Brussels says the invoice relates to the country’s commitments to the EU budget, such payments to EU officials and for certain infrastructure projects, rather than to future arrangements.

Each side has in the past used metaphors to explain its stance. EU officials have likened the situation to leaving a bar but still needing to pay for the drinks that were ordered. Some Brexiteer politicians counter, for instance, that when a person quits a golf club, there is no separation payment -- the player just leaves.

Following a Saturday in which media coverage of the leadership contest was dominated by Michael Gove’s confession that he had used cocaine, Johnson’s main rival for the job sought to switch the focus back to his political agenda.

Gove pledged to scrap the 20% sales tax levied as a result of EU rules, according to the Sunday Telegraph, citing unidentified sources. He said he would replace VAT with “lower and simpler” alternatives and would cut business taxes if he’s elected to succeed Theresa May, who is stepping down after failing to deliver a Brexit deal. He also indicated he would halt the 56 billion-pound High Speed 2 rail line linking London with northern England.

The next prime minister will be chosen in the week of July 22, according to the Conservative Party, which tightened up its leadership contest rules to accelerate the process.

The initial ballots -- in which members of parliament will whittle down the unusually crowded field -- will be held on June 13, 18, 19 and 20. Then the final two rivals will go to the party’s 120,000 members to pick the winner.

(Adds backing from Baker in the fourth paragraph.)

--With assistance from Maria Jose Valero.

To contact the reporter on this story: James Ludden in New York at jludden@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, Ian Fisher, Steve Geimann

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