Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Bank of England Governor claims a no-deal Brexit means tariffs… “We should be clear that if we move to no deal, no deal means no deal, it means there is a substantial change in the trading relationship with the European Union,” Bank of England Governor Mark Carney told BBC radio. “Not having an agreement with the EU means there are tariffs … because the Europeans have to apply the same rules to us as they apply to everyone else.” Referring to Article 24 of the World Trade Organization’s General Agreement on Tariffs and Trade, cited by Brexiteers (including Johnson) as a way to maintain tariff-free trade in the case of a no-deal Brexit, Carney said: “GATT 24 applies if you have an agreement, not if you’ve decided not to have an agreement or been unable to come to an agreement.” In Tuesday night’s Tory leadership debate, front-runner Johnson said: “There will be no tariffs and there will be no quotas.” He argued Britain should get a “standstill in our current arrangements, under GATT 24 or whatever it happens to be, until such time as we have negotiated the (Free Trade Agreement).” – Politico …but Iain Duncan Smith and David Campbell Bannerman explain why he is wrong Every time one mentions ‘Article 24’ publicly – meaning (using the correct Roman numerals) Article XXIV of the General Agreement on Tariffs and Trade (GATT) which predates the World Trade Organisation (WTO) – you receive a barrage of hysterical abuse from Remainers, often with long academic titles. They are clearly terrified we’re on to something. They say: ‘The EU would never agree to it!’, ‘The EU would not be minded to do a deal if we leave on bad terms!’, ‘You can’t do it in a no-deal situation’ and ‘We’d have to levy tariffs not just on EU goods but all good from around the world’. This last point was made on Radio 4’s Today programme discussion of Article 24 yesterday morning. But these claims are wrong. – Iain Duncan Smith MP and David Campbell Bannerman for BrexitCentral Leo Varadkar says he ‘cannot accept’ alternative arrangements plan for the Irish border The Republic of Ireland cannot accept alternative arrangements to checks on the border as a replacement for the backstop, the country’s premier has said. Leo Varadkar said he could not accept the deletion of the backstop insurance mechanism from the Withdrawal Agreement unless it had been demonstrated how such arrangements would work in practice to ensure there are no customs checks on the border between the Republic of Ireland and Northern Ireland . A new body of experts has been set up in the UK to look at potential alternative arrangements. Many Brexiteers believe technological solutions could replace the backstop. But Mr Varadkar said he could not see evidence of arrangements being outlined before the October 31 deadline for the UK’s withdrawal from the EU. – Belfast Telegraph ‘When it comes to Brexit, I’ve got a totally different approach,’ says Jeremy Hunt Is he “continuity May”? Is he just “Theresa in trousers”? “I’d be the first prime minister who has been an entrepreneur, the first prime minister to have run the NHS, the first prime minister who has won a marginal seat for half a century. That’s pretty different. And when it comes to Brexit, I’ve got a totally different approach. I’m not going to be doing what Theresa May tried to do, which is to try and force the backstop through Parliament.” Mr Hunt knows Brexit is his great weakness, as much as it is Mr Johnson’s great strength. He voted Remain in the EU referendum, and has said he would be prepared to extend Article 50 beyond October 31 if necessary and only pursue a no-deal Brexit as a “very, very last resort”. – Telegraph (£) Tusk and Juncker lay down the gauntlet to Johnson and Hunt on Brexit Donald Tusk and Jean-Claude Juncker have laid down the gauntlet to Theresa May’s successor as they said the Brexit divorce deal cannot be changed but the terms of the future EU/UK relationship could be amended. Mr Tusk, the President of the European Council, said it remained the EU’s ambition to avoid a ‘disorderly Brexit’ and that he looked forward to meeting with Boris Johnson or Jeremy Hunt depending on who emerges victorious in the race for Number 10. But he and Mr Juncker put the bloc on a collision course with the two leadership rivals as they both reiterated that the Withdrawal Agreement cannot be changed. However, Mr Tusk said that if Britain softened its negotiating red lines, potentially by seeking a closer pact built on a customs union, then the EU would be open to changing the proposed future relationship between the two sides. – Daily Mail Tusk says new British PM may enliven Brexit, but will not change EU – Reuters Macron urges next PM to show respect – The Times (£) Brexit Party in bid to win Brecon and Radnorshire by-election after Tory MP is recalled by voters A by-election has been triggered in Brecon and Radnorshire following a petition signed by 10,005 people to remove Tory MP, Chris Davies. In March Mr Davies had been convicted of a false expenses claim. In order to hold a by-election, a total of 5,303 were needed. Brexit Party politician David Rowlands said: “That is a loud and clear message that those electors want trustworthy politicians. Our movement has shown the politicians who is boss – the people of this country. We will be fielding a strong local candidate, and will be fighting not only to deliver Brexit but also on local issues.” In the 2017 general election, the share of the vote between parties was Conservatives 49 percent, Liberal Democrats 29 percent, Labour 18 percent, Plaid Cymru three percent and Ukip one percent. – Express Ousted Tory MP Chris Davies triggers by‑election (and first test for new PM) – The Times (£) The Brecon by-election could be the first real test for Boris Johnson.- John Connolly for The Spectator The great big secret backroom deal to chose the next EU leaders By law, choosing the next roster of senior EU leaders is a thoroughly democratic process: The 28 duly elected heads of state and government on the European Council choose a candidate by a reinforced qualified majority vote, meaning their pick must be supported by 21 of 28 members countries that represent at least 65 percent of the EU’s population. That candidate must then be confirmed by a majority of the 751 members of the European Parliament, who are elected in the largest election process on earth outside India. By tradition, choosing the next roster of senior EU leaders is also a highly secretive backroom deal, as the European Council demonstrated Thursday night when leaders debated how to fill the bloc’s senior positions during a closed-door dinner that stretched well past midnight in a room where cellphone signals were jammed and even their closest advisers were barred from entering. – Politico Civil Servants receive huge bonuses before EU exit is delivered Brexit may not be happening for another four months but civil servants working for the department to deliver it have already been paid £1million in bonuses, government figures have revealed. The details of performance-related pay in the year ending March 2018, shows 12 senior staff were paid £172,000 (averaging just over £14,000 per person). According to The Metro, the end of year payments totalled £142,000 with the median figure being £13,750. Junior staff got a total of £844,780 in bonuses. End of year payments worth £561,650 (an average of just over £1,320 per person) were given to 425 people. Additionally, 384 members of staff received in year payments, with the maximum being £1,000. – Express EU leaders argue over eurozone budget Dutch Prime Minister Mark Rutte buried the eurozone budget on Friday even as French President Emmanuel Macron insisted it was alive and kicking. The leaders’ contrasting remarks highlighted deep and continuing disagreements over Macron’s plan for a special budget for members of the single currency area. The French president’s blueprint is part of a broader vision of European integration that has met strong resistance from some other EU members. At a summit on Friday, EU leaders signed off on a plan for a Budgetary Instrument for Convergence and Competitiveness (BICC) that falls a long way short of Macron’s goals. – Politico Three-year prison sentence for people who damage EU flag, German state proposes The German state of Saxony is set to criminalise the destruction of the EU flag, meaning those who damage the emblem could face up to three years behind bars. Anyone who attacks the blue and gold starred cloth displayed in public, rendering it “removed, destroyed, damaged, unusable or unrecognisable” could be slapped with a lengthy jail term or hefty fine. The proposed law will also protect the European anthem, Beethoven’s Ode to Joy, according to a report in Saarbrucken Zeitung, a daily newspaper in West Germany. The Saxon bill seeks to bring the status of the union’s flag into line with that of other foreign flags and national symbols. – Express Sherelle Jacobs: Brexiteers risk a ‘Boris betrayal’ unless they play a ferocious final hand The ghastly truth is that the ERG do not trust Boris not to double-cross them, and they are going about preventing their betrayal in the worst possible way. They have concluded that the best method for ensuring that Boris takes Britain out of the EU with or without a deal by October 31 is to throw the full weight of their support behind him so that he feels beholden to them. The logic goes that, even if Boris loses his bottle when Tory Remainers inevitably resume their sabotage of Brexit, he will remember who put him in power and feel compelled to side with the Leavers. – Sherelle Jacobs for the Telegraph (£) Paul Belien: For the good of Europe, Britain needs a leader who will not appease the Eurocrats in delivering Brexit Five years ago, the Dutch Freedom Party PVV commissioned the independent research company Capital Economics to assess the economic impact if the Netherlands should leave the EU (NExit). The findings were very clear. Regardless of the outcome of any Netherlands-EU trade negotiations, in every scenario, Dutch gross domestic product was shown to be between 10 and 13 per cent higher by 2035 than it would be if the Netherlands continue as a member state of the EU. Leaving the EU allows a country to reduce the cost of doing business by reducing burdensome regulations in areas currently under the jurisdiction of Brussels. It also improves public finances by opting out of costly EU spending programmes. It reduces public expenditure through revising immigration policy. – Paul Belien for the Telegraph (£) Mark Wallace: The identity of the new Prime Minister makes a difference to the polls. But Brexit is a far more dominant factor The chart above shows the results of some fascinating new polling which YouGov has kindly shared with Conservative Home at the outset of the final, month-long round in the leadership election. Up-front, it shows that Boris Johnson is expected by voters to bring some additional electoral advantage over Jeremy Hunt, though not to a vast degree. Instead, as Marcus Roberts notes for our panel, the far more powerful determinant of voting intention is the question of whether the Conservative Party fulfils its promise to carry out Brexit and take this country out of the European Union. You might think this is obvious, but bear in mind that the outgoing Prime Minister, at least, seemed to think that a failure to keep such a promise was an electorally viable thing to do and the need for such polling becomes clear. – Mark Wallace for Conservative Home Nigel Jones: Will Boris Johnson follow Churchill’s example in how he treats his beaten Tory foes? If, as seems almost inevitable, the Tory Party chooses Boris Johnson as its next leader and our new Prime Minister, how will he handle the half of the Parliamentary party which until now has so bitterly opposed both him and Brexit? History offers a clue that, as Winston Churchill’s biographer, Boris himself will be only too well aware of. In May 1940 Churchill became Prime Minister in circumstances which are uncannily similar to those that face the country today. Britain, at war with Nazi Germany since September 1939, was facing a dire situation of desperate peril. – Nigel Jones for the Telegraph (£) Adrian Hill: Before you go to Brussels, new Prime Minister, ask the Swiss Tuesday this week saw a further cat and mouse ploy against the Swiss by the EU. Anyone thinking of drawing up a deal with the keepers of the Gordian knot in Brussels should consult the Swiss. I do most days of the week and their advice is straightforward – don’t. – Adrian Hill for Briefings for Brexit Comment in Brief Delivering Brexit – my pledge to TCW readers – John Longworth for Conservative Woman The Bank of England gets it wrong again – John Redwood’s Diary Britain needs a radical pro-Brexit chancellor, not more of Hammond’s disastrous gloom . – Matthew Lynn for the Telegraph (£) We know Boris can do Boris — but can he do Prime Minister? – James Forsyth for The Sun Trump to offer Boris instant deal to help new PM secure Brexit – Maggie Pagano for Reaction The Tory leadership contest could end up being a test run for a Brexit general election – Asa Bennett for the Telegraph (£) News in Brief Italy’s rebellious rulers take aim at central bank in guerrilla war with Brussels – Telegraph Nigel Farage shares letter from 10-year-old Brexiteer thanking him for launching his party and claiming his school is trying to ‘brainwash him to be pro-EU – Daily Mail As Johnson Prepares for Power, Tories Plot Against No-Deal Brexit – Bloomberg Prospect of Johnson premiership casts shadow over Sedwill – FT (£) Almost 300 local Labour parties set to debate anti-Brexit motion – Labour List