Closed As it happened: Brexit row triggers cabinet exits


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Welcome to our rolling Westminster liveblog. Jim Pickard, the FT’s chief political correspondent, is here with me – the FT’s capital markets correspondent – to discuss the ongoing developments. Our rolling news splash on Brexit secretary David Davis’s overnight resignation is here.

The departure of Davis just before midnight last night came as a surprise to Westminster, not least because he has threatened so many times to resign without doing so. I’m told that he came within a whisker of stepping down in early June over Theresa May’s “backstop plan”. There were several other false alarms, helpfully written up here in the New Statesman.

The news was also a big surprise to many because of the way that the Eurosceptic cabinet ministers seemed to have capitulated at Friday’s Chequers meeting, where they were effectively bounced into a so-called Soft Brexit agreement by Mrs May. In the prime minister’s Buckinghamshire stately home, her blueprint was endorsed by colleagues including arch-Brexiteer Michael Gove. But Davis saw the proposals as a capitulation to Brussels.

Here are a few other essential bits of reading – the Brexit timeline – key dates in the UK’s divorce with the EU.

Here are profiles of David Davis and his EU counterpart Michel Barnier.

And the full text of Mr Davis’s resignation letter and the prime minister’s response is here.

A note on some timings this afternoon. Gavin Barwell, the prime minister’s chief of staff, is briefing Opposition MPs – Labour, the SNP and others – on Friday’s Chequers deal now. We are expecting a statement from the prime minister in the House of Commons at 3.30pm. The foreign secretary Boris Johnson will give a press conference at 5pm. The Conservatives’ backbench 1922 committee of MPs meets early this evening, and will be addressed by the prime minister.

All eyes are on Boris Johnson, the foreign secretary, and with good reason. It was “Boris” who was quoted at the Chequers meeting describing the proposals as a “turd” that needed polishing – even if gave the prime minister his support during the dinner that evening. Until a few hours ago the best bet was that he would delay any decision to resign until the autumn, at the conclusion of the final Brexit talks – or indeed at Tory conference.

But the Davis resignation has changed the calculation. Mr Johnson skipped the formal lunch at the Western Balkans summit at Lancaster House, where he was meant to be. In theory he could have been at the COBR meeting – at the same time – to discuss the novichok death in Wiltshire. But no he was not there. Instead he is holed up with his closest advisers at his official residence, planning his next move. He will break cover to give a speech some time after 5pm at the Balkans conference, and it will be very closely watched.

BREAKING: Boris Johnson has just resigned

A Downing Street spokesman said:

“This afternoon, the Prime Minister accepted the resignation of Boris Johnson as Foreign Secretary. His replacement will be announced shortly. The Prime Minister thanks Boris for his work.”

If the departure of David Davis was damaging for Theresa May, the news about Boris Johnson stepping down raises the stakes even further. Although relations between Number 10 and the Foreign Office have been strained for months, Mr Johnson had been expected to delay his crunch decision until the closing days of the Brexit talks at the end of this year. In public relations terms, the two resignations send out a clear message to the Brexit-voting British public: whatever complicated plan hatched at Chequers last Friday, neither the Brexit secretary nor the foreign secretary believed in it enough to remain in the cabinet. And although Mr Johnson lacks a large number of “followers” in the ranks of Tory MPs, he will be a potentially powerful voice against the prime minister from the back benches.

Our Brussels correspondent Mehreen Khan reports that Donald Tusk, president of the EU council, said in Brussels: “Politicians come and go. The problems they have created remain. The mess of Brexit is the biggest problem in the history of UK-EU relations. It is very far from being solved with or without Mr Davis.”

The markets, which were quiescent as investors digested the news of Mr Davis’s resignation this morning, are now moving. Sterling is taking a hit, according to our FastFT reporter Adam Samson.

Mehreen Khan also reports that, when asked to respond as news of Mr Johnson’s resignation broke, Jean Claude Juncker said: “This clearly proves at Chequers there was unity in the cabinet”.

Some more reaction via our Berlin correspondent Tobias Buck from Martin Wansleben, the managing director of the German chambers of commerce:

“The devil is in the detail. The British model of a customs partnership is a challenge for the integrity of the EU internal market. The proposal comes with great question marks, both in practical and in political regards. That is shown also by the fact that the chief UK Brexit negotiator, David Davis, has resigned. The situation in London remains very hard to read at a time when the Brexit negotiations are in an intense phase. For German companies and other affected businesses this is not a good signal. Uncertainty continues to be very high.”

I’m ready to stand corrected but we think this is the first resignation of a British foreign secretary since Lord Carrington, in 1982, over the Falklands War. (When Robin Cook quit he had already been demoted to leader of the House of Commons)

Tobias Buck in Berlin reports:

The German government declined to comment on Mr David’s resignation, but made clear its concern once again that time for a Brexit deal was running out.

Asked about the fate of the UK’s Brexit minister, a spokesman for the German foreign ministry said on Monday: “We don’t comment on cabinet reshuffles but we have no doubt that the UK government is capable of negotiations. We have waited a rather long time for the British side to put precise proposals on the table, so we welcome the fact that this will happen now.”

Berlin would respond to the UK’s new position once the detailed white paper was published and analysed. But the spokesman made clear that Germany would continue to leave the Brexit talks in the hands of the European Commission: “It is clear that the negotiations are being conducted by the Commission and that there will be no side agreements [with individual member states]. That would weaken the EU on the whole.”

A spokeswoman for chancellor Angela Merkel added: “The Brexit negotiations are now heading for the decisive phase…As the chancellor said last week: time is running out. A political framework should be clarified by October.”

Germany’s stance in the Brexit talks was called into question last week by an incendiary letter that was sent by interior minister Horst Seehofer to the European Commission. The letter urged Brussels to place more emphasis on security co-operation between the UK and EU after Brexit, saying “the security of citizens in Europe should take precedence over all other aspects of the negotiations”.

Mr Seehofer’s intervention – which was not agreed with Ms Merkel and other ministers – sparked a backlash in Berlin, and was officially disavowed by Germany’s permanent EU representation in Brussels. In a second letter to the Commission, the director of political affairs at the German representations has since made clear that Mr Seehofer’s letter was not agreed with the German government and that Berlin had no intention of questioning the Commission’s negotiating guidelines.

The content of the second letter was first reported by Süddeutsche Zeitung and Politico.

Adam Samson reports that investors are reacting to Mr Johnson’s resignation; sterling is sliding:

The UK pound shed its gains after news of Boris Johnson’s resignation as Britain’s top diplomat cast a darker shadow over the future of Theresa May’s government. Sterling slid 0.75 per cent from the day’s high to $1.3262 on the US dollar after the news broke. It was down 0.57 per cent from its peak against the euro, with a pound buying €1.1282.

It’s getting quite febrile in the corridors of Westminster, where speculation now has turned to Theresa May’s future and whether she has one in the long term. One Eurosceptic Tory MP tells me it will be clear by the end of the day whether there is enough appetite for a leadership challenge: “There are lots of meetings going on today where this will be discussed.”

Iain Duncan Smith, a Eurosceptic MP, told the FT Boris Johnson’s resignation was “inevitable”. He added that it would be a “big shock to the government” and Theresa May’s Brexit “plan simply won’t take off.”

Today’s resignations make it look as if the Parliamentary arithmetic does not exist for a soft Brexit – unless Labour swings behind the government. (Thus Gavin Barwell’s briefing to opposition MPs right now in committee room 12.)

Yet we already know that there are around 50 Tory MPs who would not authorise a no-deal Brexit either. So where does that leave us?

One Tory Remainer said earlier today amid speculation about whether the foreign secretary would resign that Boris Johnson was now “irrelevant”. Let’s see if that continues to be the case as he settles into the backbenches.

Now the focus is on who, if anyone, will join the stampede of ministers for the exit. (Note that Suella Braverman, a junior Dexeu minister who was expected to quit, did not.)

There is one Brexiteer school of thought that their people should stay in the cabinet in order to influence events. With Davis and Johnson gone, they now have a less vocal seat at the table.

Attention is now turning to other Eurosceptics who have so far remained loyal: Grayling, Fox, Gove. If they start to get cold feet then the prime minister is in serious trouble.

Not all of the leading Brexiters are in agreement with Mr Davis’ and Mr Johnson’s actions. Douglas Carswell, the Tory-turned-UKIP-turned-independent, tweeted earlier today that it was a rash move.

Why have investors been so little moved by the political turmoil? I had a look earlier today at the possibility that many in the markets are underestimating the risks.

The prime minister has stood up in the House of Commons to give her first public appearance since the resignations of her Brexit secretary and foreign secretary. It feels like history in the making.

She opens by talking about the murder investigation around the novichok death in Wiltshire.

The PM then turns to Brexit and pays tribute to Mr Davis and Mr Johnson “for their work over the last two years”.

“We do not agree about the best way of delivering our shared commitment to honouring the result of the referendum,” she observes drily.

She says Mr Johnson brought “passion” in promoting “a global Britain” to the world and welcomes Dominic Raab, the new Brexit secretary, to the cabinet.

Tom Watson, deputy leader of the Labour Party, said:

“Theresa May’s Government is in meltdown. This is complete and utter chaos. The country is at a standstill with a divided and shambolic government. The Prime Minister can’t deliver Brexit and has zero authority left.”

In the House of Commons, the prime minister says that she believes the deal on offer from the EU would not honour the referendum result and there is a serious risk of a disorderly no deal if the EU continues on its current course.

A responsible government must prepare for a range of outcomes including the possibility of no deal. Given the short period remaining, the cabinet agreed on Friday to step those preparations up, she says.

She is now setting out the proposals drawn up on Friday.

Bookmakers William Hill have once again cut their odds of a general election taking place before the end of the year. Offered at 2/1 before David Davis resigned on Sunday night, the price is now 7/4.

“The odds of a General Election taking place this year continue to come in and another departure could see that price cut further,” said William Hill spokesman Joe Crilly.

“We have had a spirited national debate,” says Mrs May, not only at Chequers but around breakfast tables around the country. She says she has heard various different models for Brexit: “This is the right Brexit,” she says. “It is the right Brexit deal for Britain.”

Jeremy Corbyn, leader of the opposition, points out that it has taken two years for the cabinet to agree a position: “That illusion lasted 48 hours. There are only a few months left before these negotiations are supposed to conclude. We have a crisis in government, two secretaries of state have resigned and we are no closer to knowing what our relationship with neighbouring countries will look like.”

Mr Corbyn quotes Michael Gove, environment secretary, saying that the Chequers agreement united the cabinet: “How can anyone have faith in the prime minister getting a good deal with 27 EU governments when she can’t even broker a deal in her own cabinet?”

UK investors may have been unmoved by David Davis’s resignation but the departure of Boris Johnson seems to have grabbed their attention. Sterling is off 0.89 per cent from the day’s high to $1.3242 on the US dollar since the news broke, Adam Samson reports.

Kit Malthouse has been appointed as the new minister for housing, Downing St has announced, replacing Dominic Raab who in turn has become secretary of state for exiting the EU.

Mr Corbyn says the government’s position has not been tested in negotiations with the EU. He says jobs and the economy should not be relegated to a “sub-plot” beneath the story of the Tory civil war. “For the good of this country and its people the government needs to get its act together, and if it can’t, make way for those who can.”

Theresa May reminds Jeremy Corbyn that Labour proposed triggering Article 50 within days of the Brexit vote.

She also reminds Mr Corbyn that he has had no fewer than 103 resignations from his front bench: “I’ll take no lectures from the honourable gentleman.”

Iain Duncan Smith is on his feet now. He asks whether the prime minister believes the EU will offer any concessions.

Theresa May says that the white paper, which will be published on Thursday, will show proposals for the way forward in a number of areas. This is the plan I believe delivers on Brexit for the British people in an orderly way, she says.

Ian Blackford, leader of the Scottish National Party in Westminster, urges the prime minister to ignore the Eurosceptics in the Tory party. “Will she stop kow-towing to her Hard Brexiteers,” he says, “and work for all areas of the United Kingdom?”

“The absolute crisis that has engulfed the Tory party in the last 36 hours is a national embarrassment,” he tells the Commons.

Theresa May is continuing to answer questions from MPs. She is recapping the government’s position on Brexit.

Anna Soubry, a leading Remain-supporting Tory, congratulates Theresa May on her leadership. There are concerns from business that there are no details about the government’s plan for services. What detail can we expect in the white paper?

Mrs May says that it is important to maintain more flexibility in how services are dealt with than on the industrial goods side, where businesses will continue to keep EU rules in order to export into the EU. The City of London needs to have the flexibility to compete on services, she says.

John Redwood, the ardent Eurosceptic Tory MP, asks for clarity over Chequers agreement saying it left open breaches of red lines on European Court of Justice, paying money to Brussels after Brexit and immigration policy.

May replies: “We will be ending free movement….we will be able to set our own immigration rules. We will be able to continue to set our own laws in the future, as regards the ECJ it is not the case that the ECJ will have jurisdiction in the UK, it will not.”

Here is a despatch from our colleague Henry Foy in Moscow:

Russia’s foreign ministry has mocked Boris Johnson’s resignation from the cabinet and mocked Theresa May’s government, jeering the departure of a man who had a troubled time dealing with Moscow.

Mr Johnson cancelled two trips to Moscow last year at the last moment, and when he did arrive, spent most of his visit engaged in a sarcastic war of words with Russia’s foreign minster Sergei Lavrov.

“Remember, we said that all this dirty multi-faceted intrigue would be deplorable for the government of Theresa May? Well look, even the British king of political eccentricity did not want to stay in this leaky boat,” Maria Zakharova, the foreign ministry’s spokeswoman, wrote on her Facebook page.

“Much of Downing Street is covered with fog, except for one thing,” she added. “The outlines of a government crisis are becoming clearer.”

Nicky Morgan, chair of the Treasury select committee, praises Theresa May for putting forward a plan that is backed by business groups. Ms Morgan wrote a letter last week – signed by 46 Tory MPs – urging the prime minister to listen to the business world before the Chequers gathering.

Owen Paterson, a leading Eurosceptic backbencher, accuses the EU of “intransigence” intransigence. He asks at what point the government will judge it is a “drop dead moment” at which point the UK should just leave the bloc and lapse on to WTO terms. Mrs May suggests it would “not be sensible to put a date on it”.

Damian Green, the former first secretary of state, asks if we can expect as free a trade agreement as possible.

Maintaining free trade is important, Mrs May says, and the government white paper will show how we can do exactly that – maintain jobs but also increase our freedom to negotiate trade deals around the world.

Sir Bernard Jenkin asks whether the white paper will reflect the work of Mr Davis.

Mrs May says it will reflect the work of his department.

Meanwhile in the background, Tory Eurosceptics are being taunted by Nigel Farage, former leader of the UK Independence Party. He is trying to put pressure on Michael Gove, one of the leading “loyalist” Brexiteers in the cabinet, to change his mind.

Jacob Rees-Mogg asks the prime minister whether she can explain what obstacles there will be trade and how it will work.

Mrs May says there are issues the government would look at in relation to standards which could lead to us not being able to meet all the requirements someone might like in a trade deal. Tearing up all our standards is not what the public wants us to do, she says.

David Davis has told radio station LBC that he resigned because the issue was “central to my job” – but that was not the case for Boris Johnson.

He said:

“I’d have to be the champion of the policy which I didn’t believe in, so that doesn’t work [but] I don’t think it’s central to the foreign secretary.”

Some pretty hostile briefing going on from Eurosceptic elements of the Tory party, I’ve just received this from one insider: “She either junks Chequers or people are going to keep going, until she’s junked. Chequers will destroy the party. We cannot swallow it.”

Former Tory London mayoral candidate Zac Goldsmith has spoken out in defence of Boris Johnson on Twitter:

Sir Nicholas Soames asks the PM to stick to her guns and deliver a Brexit that is in the interests of our people’s prosperity and security.

Mrs May says that is exactly her intention.

Labour MP David Lammy says the nation is more divided than ever. Will she give the people a second vote?

Mrs May says she will not commit to do that. The British people had a vote and made their choice and they want the government to deliver it.

Scottish Tory leader Ruth Davidson has put out a statement backing Theresa May.

She said that if individual ministers could not sign up to cabinet responsibility, then it was “only right that they are no longer part of the government”.
The Chequers plan is “a sensible compromise approach”, Ms Davidson said, “which both respects the referendum result to leave the EU while offering pragmatism on trade, skills and regulation”.

“The prime minister deserves our support as she prepares for the upcoming tough negotiations with the EU,” Ms Davidson said. “I would urge colleagues to put their shoulders to the wheel in supporting the prime minister in that job.”

Downing St has just confirmed that Theresa May would contest any leadership challenge against her. Then again you wouldn’t really expect her to say anything else at this point.

Former culture secretary John Whittingdale congratulates the rebels:

Former chancellor Kenneth Clarke asks the government to speed up negotiations with some modest compromises on both sides to reach a conclusion.

Mrs May says other European leaders have responded positively to the proposals the UK has put forward and agreed we need to increase the pace of negotiations.

The public are taking an increasingly dim view of the government’s Brexit progress, judging by this latest survey. There is a danger that the more the Tory Eurosceptics criticise the prime minister, the more voters turn against their party. And Jeremy Corbyn’s Labour party, despite having a similar Brexit policy, is sat there hoping to capitalise on the fallout.

An update on leading Brexit-supporting ministers: trade secretary Liam Fox is on the front bench near the prime minister. Environment secretary Michael Gove and transport secretary Chris Grayling have not yet been spotted. Mr Gove is being talked up as a potential replacement for Mr Johnson as foreign secretary.

Former Swedish prime minister and international diplomat Carl Bildt gives a view on what the UK looks like from overseas right now:

There are rumours that rebel MPs may have mustered enough letters to force a leadership challenge against Theresa May:48.

Obviously it is in their interests to play up the level of disgruntlement against the prime minister. The 1922 committee of backbenchers is meeting at 5.30pm and things should become clear soon afterwards.

What is curious about the system is that Graham Brady, secretary of the 22, does not have to disclose how many signatures he has received until they reach the magical figure of 48.

What then? The rebels would need 159 MPs to oppose the prime minister. Given that there are only 60-80 hard core Brexiteers the arithmetic is not necesssarily in their favour.

Instead they must be hoping that they can dislodge her, prompting a race where authority leaks away from Mrs May and she – like Margaret Thatcher in 1990 – quits rather than face potential defeat.

But this could turn out to be far-fetched.

One pro-EU minister tells me: “She would win by miles.” Another Tory MP says: “The way this has been pitched, she should keep most MPs onside.”

It is dawning on investors that all is not well in the UK government.

David Page, senior economist at AXA Investment Management, says: “The risks of a summer of political crisis have certainly increased over the past few days.”
The sterling retreat, along with a dip in gilt yields, “are illustrative of the direction we would expect for UK asset markets if political uncertainty rises further over the coming days”, he said.

Sterling is up from its earlier lows, but only just.

Interviewed by Sky News, longstanding Brexiter John Redwood is asked whether the Chequers agreement is dead. Not yet, he says, because the prime minister still seems to like it. But, he suggests, it will be when the EU gets to it.

He does not think there is going to be a leadership challenge, he says. Tory backbenchers are more interested in talking about how to conduct a good negotiation with Brussels. He has not sent a letter of no confidence to the chairman of the 1922 committee, he says. He supports the principles the prime minister has set out and all the party is arguing about is how to implement them, he says.

If you are interested in the rules governing Tory leadership contests, here is the full detailed explainer from the House of Commons library, who are very good at producing clean, definitive factual reports.

Kit Malthouse’s appointment as Dominic Raab’s replacement at the housing and communities department makes him the eighth housing minister in as many years, as various industry figures have noted with some disgruntlement.
Noble Francis, Construction Products Association economics director, said:

David Orr, the outgoing chief executive of the National Housing Federation, said:

And David O’Leary, policy director at the HomeBuilders’ Federation, said:

It all led Peter Apps, news editor of trade journal Inside Housing, to quip:

(Mr Malthouse is not a complete nobody, we should note – he is a former deputy mayor of London, under Boris Johnson)

Meanwhile there’s a new minister at DEXEU, the Brexit department, in the form of Chris Heaton-Harris.

You may remember the Eurosceptic former whip getting into a spot of bother a while back for writing to academics asking for details of their lectures on Brexit – he was accused of McCarthyist behaviour.

Our colleague Laura Hughes is outside the meeting of Tory MPs in a Commons room:

A long round of applause greeted Theresa May as she entered the 1922 committee, amid speculation that there could be more than the requisite 48 letters to demand a vote of no confidence.

“What a lot of people,” she joked with journalists, who are camped outside the room in Parliament’s Portcullis House.

Jacob Rees- Mogg appeared cheery as he entered ahead of her, but there is no sign of either Boris Johnson, or David Davis. Michael Gove and Liam Fox were both spotted entering the meeting.

Loud banging and clapping is coming out of the 1922 committee. It’s almost as if some MPs are trying to let journalists know she has their backing.

BBC assistant political editor Norman Smith has a copy of Boris Johnson’s resignation letter. He says that Boris warns Britain is “headed for the status of a colony” and “the Brexit dream is dying, suffocated by needless self-doubt”.

“We are heading for a semi-Brexit,” he wrote, according to Mr Smith.

TalkRadio political editor Ross Kempsall has Tweeted a copy of Boris Johnson’s resignation letter.
Here are a couple of screenshots:

Boris Johnson has just Tweeted his resignation letter:

OK we’re going to wrap up the liveblog now. Thanks for joining us for this extraordinary day in British politics. We will continue to keep you up to date on further developments in our main news coverage.