Johnson Critic Duncan Quits as U.K. Minister: Brexit Update

Johnson Critic Duncan Quits as U.K. Minister: Brexit Update

(Bloomberg) — Voting closes in the race to become next Conservative Party leader and prime minister. Boris Johnson is the clear favorite, and his demand that ministers be prepared to accept leaving the European Union without a deal is expected to trigger a series of resignations from the government. Foreign Office Minister Alan Duncan submitted his on Monday morning.

Key Developments:

Foreign Office Minister Alan Duncan confirms he has resignedChancellor of the Exchequer Philip Hammond says he’ll quit on Wednesday if Boris Johnson becomes prime minister; Justice Minister David Gauke has also said he’ll resignVoting in Tory leadership contest closes at 5 p.m., with winner to be announced Tuesday. Theresa May is due to step down WednesdayPound falls

Tories Suspend Elphicke, Further Eroding Majority (2 p.m.)

Tory MP Charlie Elphicke has had the Conservative whip suspended after he was charged with sex offenses (see 12:30 p.m.), according to a person familiar with the decision.

The suspension of Elphicke, who supported Boris Johnson’s leadership campaign, technically reduces the governing party’s already slim majority, though he’s likely to continue to support the party in most votes in Parliament.

Major Calls on New PM to Listen to All Sides (1:30 p.m.)

Former Prime Minister John Major said the U.K.’s next leader should not act only for ‘one hard-line faction’ on Brexit.

“The new prime minister must choose whether to be the spokesman for an ultra-Brexit faction, or the servant of the nation he leads,’’ Major said in a statement. “He cannot be both, and the choice he makes will define his premiership from the moment of its birth.’’

Major, whose premiership from 1990 to 1997 was overshadowed by splits in the Conservative Party over Europe, also said the next prime minister would face “uncompromising opposition’’ if he ignores views from all sides of the debate.

Charges Could Pose Threat to Tory Majority (12:30 p.m.)

The charging of Conservative MP Charlie Elphicke with three counts of sexual assault is a potential headache for Britain’s incoming prime minister. If he decides to suspend the whip while Elphicke goes through the criminal process it would further reduce the wafer-thin Tory majority in the House of Commons.

Elphicke, a supporter of Boris Johnson’s push for the premiership, held his seat in Dover by 6,437 votes in 2017. Former Chancellor of the Exchequer George Osborne tweeted that the Tories’ formal effective majority would soon be cut to just one vote.

The party is also fighting a by-election in Brecon and Radnorshire on August 1 after its MP Chris Davies was unseated by a recall petition triggered by his conviction over a false expenses claim. If Davies fails to win back his seat it will further add to the Tory reliance on the votes of Northern Ireland’s Democratic Unionist Party, increasing their bargaining power.

Brexit May Have Already Triggered Recession: Niesr (11 a.m.)

The U.K.’s exit from the European Union may have already pushed the economy into a technical recession, according to the National Institute of Economic and Social Research. There’s about a one-in-four chance that the economy is already shrinking, the think tank said.

In a gloomy set of new forecasts, Niesr predicted that, even assuming a smooth exit in October, the economy will grow 1% in 2019 and 1% in 2020. The outlook worsens if there is a disorderly no-deal Brexit, with Niesr seeing the possibility of a “severe” downturn.

Duncan Laments ‘Dark Cloud of Brexit’ (10:35 a.m.)

In his resignation letter to Prime Minister Theresa May, Alan Duncan said he was stepping down in “anticipation” of the change of leadership on Wednesday. “It is tragic that just when we could have been the dominant intellectual and political force throughout Europe, and beyond, we have had to spend every day working beneath the dark cloud of Brexit,” he said.

Duncan didn’t directly refer to Boris Johnson in the letter; he did, though, say he was “deeply upset” that efforts to secure the release of Nazanin Zaghari-Ratcliffe, the British-Iranian woman held in Iran on spying charges, had failed.

Johnson’s own dealings with Iran were widely regarded as a low point of his time as foreign secretary. His incorrect comment that Zaghari-Ratcliffe had been teaching journalists rather than visiting her family was seized on by Iranian state television as an “unintended admission” of her guilt. Her family says her sentence was extended as a result; Johnson has denied that.

Foreign Office Minister Duncan Quits (9:45 a.m.)

Alan Duncan, minister of state for Europe and the Americas at the Foreign Office, confirmed he has resigned from the government. Duncan has been a vocal critic of Boris Johnson, under whom he served when the Tory front-runner was foreign secretary. Chancellor of the Exchequer Philip Hammond and Justice Secretary David Gauke have both said they’ll step down before Johnson takes office — assuming he wins.

Earlier:

U.K.’s Hammond to Quit If Boris Johnson Wins Race to Succeed MayA New Leader Won’t Save Most-Hated Market From Brexit’s GripBrexit Bulletin: Thwarting JohnsonU.K. Business Chief Says New Premier Must Restore Confidence

–With assistance from David Goodman, Olivia Konotey-Ahulu and Tim Ross.

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net;Kitty Donaldson in London at kdonaldson1@bloomberg.net;Joe Mayes in London at jmayes9@bloomberg.net

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

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