Boris Johnson threatens to withhold $50 billion Brexit payment

Posted June 24, 2019 by smithsam

UK’s Boris Johnson and the leading candidate to succeed Theresa May threatens to withhold a previously agreed 39 billion pound ($50 billion) Brexit payment

Boris Johnson is the leading candidate to succeed Theresa May as Britain’s next prime minister and has threatened to withhold $50 billion Brexit payment until the European Union gives Britain better exit terms. This is following the resignation of May as the British PM as well as stepping down as the leader of the governing Conservatives.

The EU has also stated severally that it will not reopen discussion with UK on the Brexit transition deal reached with May last year. Unfortunately, British lawmakers have rejected the deal three times, which led to the resignation of the prime minister.

Johnson is a former foreign secretary that served in May’s cabinet and is popular with ordinary Conservative Party members. These members will decide between the two candidates who come top in a series of votes by Conservative lawmakers over the coming weeks.

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

Britain is scheduled to leave the EU at the end of October. However, if no deal is approved and the government fails to ask the EU for another delay, there is the risk of a major economic disruption occurring from a disorderly departure.

The 39 billion pounds is the outstanding British liabilities to the EU, which would be paid over a number of years as contained in the withdrawal agreement negotiated by May. Johnson has also stated that border arrangements with Ireland should be settled only as part of a long-term agreement as against a “backstop” that would avoid checks on Northern Ireland’s border.

In another light, one of Johnson’s rivals, environment minister Michael Gove, has said that he would scrap the value-added tax (VAT) levied on most goods and services, replacing it with a lower U.S.-style sales tax.

SajidJavid is another leadership contender and he has expressed his willingness to pay Ireland hundreds of millions of pounds towards the cost of new border arrangements to facilitate a Brexit deal.

More economic news and other related information as well as the services offered by Pacific Capital Advisors can be found on their website.

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Last Updated June 24, 2019