Europe Politics

Brexit secretary on whether UK PM could defy no-deal law: Our focus is on securing a deal

Key Points
  • The secretary's words come on the heels of the resignation of U.K. Work and Pensions Secretary Amber Rudd, who quit her post late Saturday.
  • Johnson's administration has taken four defeating blows over the course of the last week as lawmakers from across parties joined forces to prevent an early snap election and block the possibility of a no-deal Brexit on October 31.
  • The prime minister also lost his majority in parliament this week and sacked 21 members of his party.
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Labour leader's position on Brexit is 'incoherent,' Stephen Barclay says

The U.K.'s Brexit secretary on Sunday insisted that ministers would follow ministerial code, in response to the question of whether Prime Minister Boris Johnson will break the law and defy parliament by pursuing a no-deal Brexit.

The legal question is one that could rock the future of the British government — and one that if violated, could potentially land the prime minister in jail.

Asked if the Johnson would defy the law, Stephen Barclay, Secretary of State for Exiting the European Union, refrained from offering a definitive answer, telling CNBC: "Well the ministerial code requires obeying the law … but the key issue is how do we deliver on the democratic results of the British people. This was the biggest vote in our country's history, people want to see this done."

Parliament is expected to pass legislation Monday that would require the prime minister to seek an extension to Article 50, the mechanism triggering departure from the EU, to avoid crashing out of the bloc without a deal. A former top prosecutor on Saturday warned that were he to go against the law, Johnson would be in contempt of court and would face the same punishment as any ordinary citizen.

Barclay maintained that ministers are bound by ministerial rules, but did not elaborate further, instead focusing on the need for a "creative" approach from the EU to fix the current impasse between London and Brussels.

"Let's get this done, but it does require the (EU) Commission not to just to say in public that they will be creative and flexible, it also requires them in private to get into those discussions with us, so we get this deal over the line," he told CNBC's Steve Sedgwick at the Ambrosetti Forum in Cernobbio, Italy on Sunday.

Meanwhile on Sunday, U.K. Foreign Secretary Dominic Raab called the Brexit delay bill "lousy" when speaking to Sky News and vowed to check "very carefully what it does and doesn't require." But he insisted the government would not break the law.

Three years and two extensions after the U.K. held its referendum, Brexit still remains up in the air.

Anti-Brexit demonstrators outside the British Parliament in London.
Yui Mok | PA Images | Getty Images

Barclay's words come on the heels of the resignation of U.K. Work and Pensions Secretary Amber Rudd, who quit her post late Saturday in protest at Prime Minister Boris Johnson's handling of the country's exit from the EU, calling his actions "an assault on decency and democracy."

Johnson's administration has taken four defeating blows over the course of the last week as lawmakers from across parties joined forces to prevent an early snap election and block the possibility of a no-deal Brexit on October 31.

The prime minister also lost his majority in parliament this week and sacked 21 members of his party after they backed a plan to prevent the country from leaving the EU without a deal. Johnson is determined to achieve Brexit by the end of October with or without a deal, a move experts say could have devastating economic consequences.

Brexit Secretary Stephen Barclay leaves after a cabinet meeting at 10 Downing Street on June 11, 2019 in London, England. Since Theresa May resigned as Prime Minister the final candidates for the Conservative Party leadership race have been confirmed, with 10 running to become the next Prime Minister.
Alberto Pezzali/NurPhoto via Getty Images

The pound has recently hit its lowest level in three years, and officials in Brussels maintain that they have seen no new plans for a Northern Irish backstop or other fundamental components of an exit deal since Johnson took office.

Labour Party leader Jeremy Corbyn seized the opportunity to criticize Johnson's leadership when the administration officially lost its majority on September 3: "This is a government with no mandate, no morals, and, as of today, no majority," he said.

Barclay struck back at Corbyn Sunday when speaking to CNBC, calling his position on Brexit "incoherent."

"He wants to extend in order to have time for him to negotiate a new deal, which he then says he would campaign against. So just to be clear on that, he wants more time to negotiate a deal that he will then work against," he said.

"Which I think is an incoherent position. He's said he would respect the referendum result in his manifesto, now he's gone back on his word."

A Labour party spokesperson was not immediately available for comment when contacted by CNBC.

'Absolutely convinced'

Barclay's message echoes that of U.K. Finance Minister Sajid Javid, who earlier on Sunday issued a full-throated defense of his government, saying he was "absolutely convinced" that Westminster could still get a Brexit deal and that the view that the government is not doing enough to get a one "could not be further from the truth." He added that Johnson would attend the EU Summit on October 17 and try to strike a deal, but will not ask for an extension.

Businesses in both Europe and the U.K. have struggled to make contingency plans for the latter's departure from the bloc, and the uncertainty has significantly stalled investment decisions. Many international companies are withholding expansions and and charting moves out of the U.K. as uncertainty reigns over the fate of the country and its status in relation to the EU.

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Resignation the only way out of stalemate for Boris Johnson, academic says

Lobbying Group Frankfurt Main Finance claimed in a recent report that London's finance industry is poised to lose up to $900 billion by March 2019, while consulting firm EY found that financial services firms plan to move $1 trillion in assets out of the U.K.

The figure is small, however, when compared to the U.K.'s overall financial sector, EY noted. Britain's banking sector alone is thought to be at almost $11 trillion, though experts say this could change depending on what happens during and after October.

British firms have diverted $10 billion of investment to the EU due to Brexit, a report from the London School of Economics revealed earlier this year. EU businesses have cut their spending in Britain, leading to losses for the U.K. of more than $13 billion, and the report said that figure may rise.

One study found that EU exports to Britain could halve in the event of a no-deal Brexit.

Still, a number of global firms continue to show confidence in the U.K., with major investments for new offices and headquarters coming into London from the likes of Apple, Google and Facebook.