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Boris Johnson urges rebels to back him to avoid Brussels driving a wedge through UK 

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Boris Johnson was facing a mounting Tory rebellion over his treaty-busting Brexit legislation last night.

The Prime Minister made a passionate appeal to MPs to back the Internal Market Bill, telling them it was needed to stop the EU trying to ‘break up our country’.

In an olive branch to rebel MPs, Mr Johnson said Parliament would get a separate vote if ministers decided to invoke new powers that would over-ride elements of the Brexit deal signed by the PM last year.

Mr Johnson said the legislation – which was being voted on late last night – was essential to prevent the EU from driving a wedge between Northern Ireland and the rest of the UK in the event of trade talks failing.

He said Brussels had even threatened to ‘blockade’ British food exports, adding: ‘Absurd and self-defeating as that action would be, the EU still have not taken this revolver off the table.’

Mr Johnson said: ‘I am afraid these threats reveal the spirit in which some of our friends are currently minded to conduct these negotiations.’

But to the alarm of Tory whips, the ranks of the rebels continued to swell throughout the day, led by a string of senior figures, including former chancellor Sajid Javid.

Ministers were confident they would win last night’s vote on the principle of the legislation, which is designed to protect the integrity of the UK’s internal market after Brexit. But there was mounting concern that the rebels could join forces with Labour to inflict a damaging defeat on the Government next week when MPs will try to place a ‘parliamentary lock’ on the new powers.

Rebel sources suggested more than 30 MPs were deeply unhappy with the legislation – approaching the 40 needed to overturn the Government’s majority. Downing Street refused to say whether Tory MPs who failed to support the Bill would be kicked out of the party, with a source saying: ‘All options remain on the table.’

Boris Johnson today accused the EU of putting a 'revolver' on the table during trade talks in the form of an alleged threat to block GB food exports to Northern Ireland as he defended his plans to override parts of the Withdrawal Agreement

Boris Johnson today accused the EU of putting a ‘revolver’ on the table during trade talks in the form of an alleged threat to block GB food exports to Northern Ireland as he defended his plans to override parts of the Withdrawal Agreement

David Cameron yesterday became the fifth former PM to criticise the Government’s plans, saying he had ‘grave misgivings’ about a move which ministers admit would ‘break international law’.

Mr Javid, who served as Mr Johnson’s Chancellor until February, said he was ‘unable to support’ the new law unless it amended.

He said it was ‘not clear’ why the UK had to break the law when the Brexit deal already contained mechanisms for resolving disputes.

Rehman Chishti resigned his post as the PM’s envoy on religious freedom, saying: ‘As an MP for ten years and former barrister, values of respecting rule of law and honouring one’s word are dear to me.’

Two former attorney generals also condemned the move.

Shadow business secretary Ed Miliband accused the Prime Minister of 'legislative hooliganism'

Shadow business secretary Ed Miliband accused the Prime Minister of ‘legislative hooliganism’

Geoffrey Cox, who served in Mr Johnson’s Cabinet until February, said the ‘unpalatable’ consequences of the PM’s Brexit deal had been apparent when he signed it last year. Jeremy Wright, who served as attorney general under Theresa May, said he was ‘profoundly disturbed’ by the threat to break international law.

Labour business spokesman Ed Miliband criticised Mr Johnson in the Commons, saying: ‘This is his deal. His mess and his failure. For the first time in his life it’s time to take responsibility. Either he wasn’t straight with the country about the deal in the first place or he didn’t understand it.’ 

MPs are due to vote on the Government’s UK Internal Market Bill for the first time this evening. The legislation would enable ministers to override parts of the divorce deal struck with Brussels last year. 

Ministers have admitted the proposals would break international law and a growing number of Tory MPs have said they will not be able to support the Bill.         

Theresa May's former legal chief Geoffrey Cox (pictured together in 2019) said it would be 'unconscionable' for the Government to override the Brexit divorce deal

Theresa May’s former legal chief Geoffrey Cox (pictured together in 2019) said it would be ‘unconscionable’ for the Government to override the Brexit divorce deal

Brexit: What happens next?

MPs will vote this evening, likely at 10pm, on whether to give the UK Internal Market Bill its second reading – the first hurdle any new law must clear.

The Government should win the vote easily but all eyes will be on how many Tory MPs abstain or vote against the legislation.

The Bill’s Committee stage will then start tomorrow as MPs scrutinise the nuts and bolts of the Bill and propose amendments.

The major flashpoint is not expected to come until next Monday when MPs start discussing the provisions which relate to Northern Ireland.

An amendment put forward by Tory MP Bob Neill which would give Parliament a veto on any attempt by the PM to override the Withdrawal Agreement is then due to be voted on next Tuesday.

Reports suggest up to 30 Tory MPs could rebel on the amendment which would still not be enough for the Government to lose given it has a majority of 80.

But such an outcome would be massively damaging to Boris Johnson’s authority. Whether or not to punish the rebels by withdrawing the Tory whip would also represent a massive headache for Number 10.  

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The legislation will enable the UK to unilaterally make decisions on key issues, like customs arrangements between mainland Britain and Northern Ireland, contained within the Withdrawal Agreement. 

Brussels is adamant that the decisions must be made by a joint committee made up of people from both sides – as set out in the treaty.

But the Government argues its new proposals are necessary in order to protect the integrity of the UK should the two sides be unable to agree terms. 

The Government is almost certain to win tonight’s first vote on the legislation as Mr Johnson has an 80-strong majority and backing from the DUP. 

However, many Tories are alarmed at the potential impact reneging would have on the UK’s global reputation, and could support an amendment to introduce a ‘parliamentary lock’ later in the process. 

Mr Johnson tried to win over Conservative rebels as he told the Commons the legislation ‘should be welcomed by everyone who cares about the sovereignty and integrity of our United Kingdom’. 

Setting out his reasons for trying to override parts of the Brexit divorce deal, he said: ‘I regret to have to tell the House that in recent months the EU has suggested that it is willing to go to extreme and unreasonable lengths.

‘Using the Northern Ireland protocol in a way that goes well beyond common sense, simply to exert leverage against the UK in our negotiations for a free trade agreement.

‘To take the most glaring example, the EU has said that if we fail to reach an agreement to their satisfaction they might very well refuse to list the UK’s food and agricultural products for sale anywhere in the EU.

‘And it gets even worse because under this protocol that decision would create an instant and automatic prohibition on the transfer of our animal products from Great Britain to Northern Ireland.

EU to delay euro clearing decision over Boris Brexit law threat 

The European Union is set to delay a decision on allowing clearing houses in London to continue clearing euro transactions for EU-based clients due to Britain’s plan to breach part of the Brexit divorce settlement.

The delay is one of the first warning shots from the EU as MPs vote later on a bill that would breach parts of Britain’s Withdrawal Agreement from the bloc.

Brussels had said it would grant Britain ‘time-limited’ access to euro derivatives clearing from January to avoid huge disruption to markets, as a unit of the London Stock Exchange (LSE) clears over 90 per cent euro-denominated swaps that are widely used by companies.

The European Commission was due to formally take that decision later this week, but is now expected to delay it until around the end of the month, Reuters reported, the source said, citing an a derivatives industry source.

The Commission had no immediate comment.

The delay was linked to Britain’s perceived unpicking of the Withdrawal Agreement it signed with the bloc, the source added.

Britain left the EU in January and transition arrangements that still allow unfettered access to the bloc end on December 31. Without legal certainty of access to the EU, the LSE’s clearing unit LCH must give its clients in the bloc three-months’ notice to move billions of euros worth of swaps positions out of Britain.

Euro clearing has long been a battleground between Britain, to keen to preserve London’s clout as a global finance hub, and EU policymakers, who believe the bulk of activity should reside in the euro zone under the eye of the European Central Bank.

But moving large swaps positions from LCH to rivals such as Deutsche Boerse’s Eurex in Frankfurt in a short time would be costly for banks and unnerve markets.

Brussels had therefore opted to allow more time for this to happen, although it had not said how much time.

If Britain’s bill to override parts of its Brexit divorce settlement becomes law it could sour its attempts to have access to other financial activities in the bloc such as trading shares.

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‘Our interlocutors on the other side are holding out the possibility of blockading food and agricultural transports within our own country.’

He added: ‘I have to say that absurd and self-defeating as that action would be, even as we debate this matter the EU has not taken that particular revolver off the table.

‘I hope that they will do so and that we can reach a Canada-style free trade agreement as well.’

Mr Miliband accused Mr Johnson of presiding over ‘legislative hooliganism’, telling the Commons: ‘I don’t understand this. He signed the deal, it’s his deal, it is the deal that he said would protect the people of Northern Ireland.

‘And I have to say to him, this is not just legislative hooliganism on any issue, it is on the most sensitive issues of all.’

The shadow business secretary said Mr Johnson had previously lauded the Withdrawal Agreement he secured but now he insists it is ‘contradictory and ambiguous’.

Mr Miliband added: ‘What incompetence. What failure of governance. And how dare he try and blame everyone else.

‘Can I say to the Prime Minister, this time he can’t blame (Theresa May), he can’t blame John Major, he can’t blame the judges, he can’t blame the civil servants, he can’t sack the cabinet secretary again.

‘There’s only one person responsible for it, and that is him. This is his deal, it’s his mess, it’s his failure.’ 

Mr Johnson is facing considerable discontent on the Tory benches over his plans to break international law with a series of senior figures having now set out their opposition to the Bill. 

Mr Javid said this afternoon: ‘Breaking international law is a step that should never be taken lightly. Having carefully studied the UK Internal Market Bill it is not clear to me why it is necessary to do so.’

The former chancellor said he ‘cannot support the UK pre-emptively reneging’ on the Withdrawal Agreement. 

‘I will therefore regretfully be unable to support the Bill at its second reading, and urge the Government to amend it in the coming days,’ he added. 

Meanwhile, Mr Cox, who served as attorney general under Mrs May and Mr Johnson until he was sacked in February, last night broke ranks to condemn the legislation. 

What have the five living former PMs said about Boris Johnson’s Brexit plans? 

Theresa May: ‘The United Kingdom Government signed the Withdrawal Agreement with the Northern Ireland protocol. This Parliament voted that Withdrawal Agreement into UK legislation. The Government is now changing the operation of that agreement. Given that, how can the Government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?’ 

David Cameron: ‘Passing an Act of Parliament and then going on to break an international treaty obligation is the very, very last thing you should contemplate. It should be an absolute final resort. So, I do have misgivings about what’s being proposed.’

Gordon Brown: ‘This is a huge act of self harm. We knew there was a debate over fishing and over state aid but then to explode the argument into breaking an international treaty has been condemned by so many people.’ 

Tony Blair: ‘As the world looks on aghast at the UK, the word of which was once accepted as inviolable, this government’s action is shaming itself and embarrassing our nation.’

Sir John Major: ‘For generations, Britain’s word – solemnly given – has been accepted by friend and foe. Our signature on any treaty or agreement has been sacrosanct. Over the last century, as our military strength has dwindled, our word has retained its power. If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained.’  

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He said Mr Johnson should not ‘observe treaty obligations with his fingers crossed behind his back’, adding that he could not support a bill which risked undermining ‘the standing and reputation of Britain in the world’.

Mr Cox – axed from the Cabinet in February’s reshuffle – wrote in The Times: ‘It is unconscionable that this country, justly famous for its regard for the rule of law around the world, should act in such a way.’

He then said this morning that the Government ‘knew’ what it was signing up to when it agreed and the ratified the Withdrawal Agreement. 

He told Times Radio: ‘What I can say from my perspective is we simply cannot approve or endorse a situation in which we go back on our word, given solemnly not only by the British Government and on behalf of the British Crown, but also by Parliament when we ratified this in February, unless there are extreme circumstances which arrive involving a breach of duty of the good faith by the EU.

‘In those circumstances, there are then lawful remedies open to us and it is those we should take rather than violating international law and a solemn treaty.’

He continued: ‘The breaking of the law leads ultimately to very long-term and permanent damage to this country’s reputation and it is also a question of honour to me. 

‘We signed up, we knew what we were signing, we simply can’t seek to nullify those ordinary consequences of doing that and I simply can’t support that.’ 

Number 10 has earlier dismissed the criticism from Mr Cox and said the Bill will ‘protect seamless trade and jobs in all four corners of the United Kingdom following the end of the transition period’.

‘It will guarantee UK companies can trade unhindered in every part of the UK while maintaining world-leading standards for consumers and workers who rely on them,’ the PM’s spokesman said. 

‘It will also provide a vital legal safety net, it removes any ambiguity should an agreement not be reached at the Joint Committee on the Northern Ireland Protocol. 

‘It protects the integrity of the UK internal market, it ensures ministers can always deliver on their obligations to Northern Ireland and protects the gains from the peace process.’ 

The Government was rocked this morning by Mr Chishti’s decision to quit as a special envoy. 

He said in his resignation letter to Mr Johnson: ‘Having read your letter to colleagues, as well as wider statements on the matter, I will not be able to support this Bill on a matter of principle.

‘I have real concerns with the UK unilaterally breaking its legal commitments under the Withdrawal Agreement.

Tory MP Rehman Chishti today resigned as the Prime Minister's Special Envoy for Freedom of Religion or Belief because of his opposition to the UK Internal Market Bill

Tory MP Rehman Chishti today resigned as the Prime Minister’s Special Envoy for Freedom of Religion or Belief because of his opposition to the UK Internal Market Bill

Mr Chishti said he could not support the legislation because it would 'unilaterally break' Britain's legal commitments

Mr Chishti said he could not support the legislation because it would ‘unilaterally break’ Britain’s legal commitments  

‘During my 10 years in Parliament and before that as a Barrister, I have always acted in a manner which respects the rule of law.

‘I feel very strongly about keeping the commitments we make; if we give our word, then we must honour it.

‘Voting for this Bill as it currently stands would be contrary to the values I hold dearest.’

He added: ‘I am only too sorry that our difference on this matter means that I cannot vote for the Bill in its current form, on a matter of principle, and thereby will not be able to continue to serve as your Special Envoy.’ 

Mr Chishti was appointed the PM’s Special Envoy for Freedom of Religion and Belief in September last year and was tasked with promoting the UK’s ‘firm stance’ on religious freedom and tolerance around the world.   

The role, based out of the Foreign Office, involved supporting people across the globe who are persecuted for their faith or beliefs. 

The Prime Minister’s Official Spokesman said Mr Johnson thanked Mr Chishti for his service and ‘would wish him well for the future’. 

He added: ‘But I think we have very clearly set out the reasons for the measures relating to the Northern Ireland protocol. The PM believes it is critical it is passed.’ 

Mr Cameron’s intervention this morning means that every living former prime minister has now spoken out against Mr Johnson’s plans, following criticism from Theresa May, Sir John Major, Tony Blair and Gordon Brown. 

Mr Cameron told Sky News: ‘Passing an Act of Parliament and then going on to break an international treaty obligation is the very, very last thing you should contemplate.

‘It should be an absolute final resort. So, I do have misgivings about what’s being proposed.’

Justice Secretary Robert Buckland (pictured) yesterday defended the Government's Brexit legislation, saying it was 'in accordance with the most honourable traditions of the British state'

Justice Secretary Robert Buckland (pictured) yesterday defended the Government’s Brexit legislation, saying it was ‘in accordance with the most honourable traditions of the British state’

However, the ex-Tory leader suggested Mr Johnson’s plans should be seen in the wider context of the Government’s attempts to secure a post-Brexit trade deal with Brussels. 

He said: ‘So far what’s happened is the Government has proposed a law that it might pass, or might not pass, or might use, or might not use depending on whether certain circumstances do, or do not appear. 

‘And, of course, the bigger picture here is that we are in a vital negotiation with the European Union to get a deal and I think we have to keep that context, that big prize in mind.

‘And that’s why I have perhaps held back from saying more up to now.’  

A spokesman for the European Commission today reiterated the EU’s position that the Withdrawal Agreement must be stuck to ‘no ifs, no buts’.

‘We have played a straight bat on this,’ the spokesman said.

‘We have set this out extremely clearly, and the rest, frankly, is internal debate in the United Kingdom.’

Justice Secretary Robert Buckland yesterday defended the proposed laws as ‘in accordance with the most honourable traditions of the British state’.

However, he also delivered a thinly-veiled threat to resign if the legislation is abused. 

Mr Buckland has faced calls to quit, with critics saying the move is incompatible with his own oath as Lord Chancellor to uphold the law. 

‘If I see the rule of law being broken in a way I find unacceptable then of course I will go,’ Mr Buckland said. 

The second reading vote tonight is the first hurdle for the legislation, which caused a storm last week when Northern Ireland Secretary Brandon Lewis admitted it would break international law.

The EU has threatened to collapse negotiations on a future trade deal unless the UK backs down by the end of the month. 

Mr Barnier yesterday said he was ¿not refusing to list¿ Britain as a so-called ¿third country¿ for food export purposes. But he said the listing could only take place when the UK explained its biosecurity rules

Mr Barnier yesterday said he was ‘not refusing to list’ Britain as a so-called ‘third country’ for food export purposes. But he said the listing could only take place when the UK explained its biosecurity rules

In an exchange with Mr Barnier on Twitter last night, Lord Frost hit back: ¿The EU knows perfectly well all the details of our food standards rules because we are operating EU rules

In an exchange with Mr Barnier on Twitter last night, Lord Frost hit back: ‘The EU knows perfectly well all the details of our food standards rules because we are operating EU rules

The main showdown in the Commons is likely to be over an amendment being put together by Tory former minister Bob Neill. 

That could attract dozens of Tory rebels next week, although it still looks difficult to overturn the government’s massive 80 seat majority.    

Mr Johnson’s chief Brexit negotiator David Frost and his EU counterpart Michel Barnier yesterday had a blazing row about the food exports issue on Twitter. 

Mr Barnier denied threatening to block British food exports if trade talks collapsed.

But Lord Frost said the EU negotiator ‘explicitly’ made the threat and warned it could lead to food from Great Britain being banned from sale in Northern Ireland.      

Eau no! End of perfume bargains at duty-free

Duty-free bargains at airports will end on goods including perfume, clothing and electronics from January 1.

Ministers announced tax savings will now only apply to sales of alcohol and tobacco.

The decision, which affects all outbound passengers, has been called a ‘hammer blow’ to struggling airports. As much as 40 per cent of their income comes from airside retailers.

Industry experts say it could lead to thousands of job losses as shops pull out of airports.

They fear some regional airports could even go bust.

It has intensified calls for an airport Covid testing regime to re-open Britain’s skies.

Karen Dee, chief executive of the Airport Operators Association, said: ‘Passengers will be disincentivised from making purchases as they travel through the UK.

‘Many foreign visitors will now choose to go elsewhere, attracted by the beneficial tax and excise regimes of our European competitors.’

Francois Bourienne, chair of the UK Travel Retail Forum, added: ‘It may well be the best gift the UK could have given the EU as well as a massive blow for UK plc.’

The Treasury said the decision was taken ‘as the tax concession was not always passed on to consumers in the airport’.

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JASON GROVES: Could PM’s tactics break the impasse over a deal?

It was an admission that stunned MPs, enraged Brussels and left Boris Johnson facing the biggest Tory rebellion since the election.

Brandon Lewis was making a workmanlike defence of the new Internal Market Bill following reports that it would clash with obligations made by the Prime Minister in last year’s Brexit deal.

But, asked whether the legislation would break the law, he did not obfuscate, stating simply: ‘Yes, this does break international law in a very specific and limited way.’

Cue pandemonium, with the EU threatening legal action against the UK and Mr Johnson facing criticism from all five living former prime ministers.

It was an admission that stunned MPs, enraged Brussels and left Boris Johnson (pictured) facing the biggest Tory rebellion since the election

It was an admission that stunned MPs, enraged Brussels and left Boris Johnson (pictured) facing the biggest Tory rebellion since the election

The admission was not a gaffe. The Northern Ireland Secretary read his answer off a script which had been cleared by No 10.

So what was the Government playing at?

The genesis of the controversial measures came in July, when the EU’s chief Brexit negotiator Michel Barnier leaned across the table and casually suggested to his British counterpart David Frost that British food exports to the EU could be blocked in the event of No Deal.

According to British negotiators that was the moment they realised that the EU was threatening to take a ‘maximalist position’ towards the interpretation of the Brexit deal.

The British side was already worried that ‘ambiguous’ sections of the deal could allow the EU to drive a wedge between Northern Ireland and the rest of the UK.

If he was willing to contemplate UK food exports to the EU, potentially preventing British food being sent to Northern Ireland, what else might he be willing to do?

The genesis of the controversial measures came in July, when the EU¿s chief Brexit negotiator Michel Barnier (pictured) leaned across the table and casually suggested to his British counterpart David Frost that British food exports to the EU could be blocked in the event of No Deal

The genesis of the controversial measures came in July, when the EU’s chief Brexit negotiator Michel Barnier (pictured) leaned across the table and casually suggested to his British counterpart David Frost that British food exports to the EU could be blocked in the event of No Deal

Mr Barnier’s threat has apparently been repeated several times in the intervening weeks and was finally made public at the end of last week.

In the meantime, officials led by Lord Frost and Dominic Cummings secretly drafted a string of measures designed to limit EU interference in the UK.

Everyone involved knew the measures would break the Brexit treaty signed by the PM last year, but felt it was justified because of the EU’s ‘absurd’ negotiating position.

Ministers finally signed off the measures last Thursday.

But before they could lay the groundwork for the extraordinary changes they were leaked by officials to an anti-Brexit newspaper.

The following day, the Government’s top lawyer resigned in protest and No 10 was on the back foot. Many Tory MPs believe the move was a negotiating tactic designed to provoke a crisis in negotiations that were going nowhere.

Everyone involved knew the measures would break the Brexit treaty signed by the PM last year, but felt it was justified because of the EU¿s ¿absurd¿ negotiating position

Everyone involved knew the measures would break the Brexit treaty signed by the PM last year, but felt it was justified because of the EU’s ‘absurd’ negotiating position

Tobias Ellwood, Tory chairman of the Commons defence committee, suggested the Government’s move was driven by ‘Nixonian madman theory’ – convince the other side that you are mad enough to do anything and they will back off.

Ministers flatly deny that the incendiary move was designed to increase pressure on the EU to cut a deal.

Sources insist that the provisions are needed to provide a ‘safety net’ to protect the integrity of the UK should talks on a deal fail.

But it is hard to escape the conclusion that the timing of the move was designed to influence the moribund negotiations.

The PM has set a deadline of mid-October for clinching a deal. If ministers had wanted to they could easily have pushed through the legislation after that rather than detonating a row at a critical stage.

Tobias Ellwood, Tory chairman of the Commons defence committee, (pictured) suggested the Government¿s move was driven by ¿Nixonian madman theory¿ ¿ convince the other side that you are mad enough to do anything and they will back off

Tobias Ellwood, Tory chairman of the Commons defence committee, (pictured) suggested the Government’s move was driven by ‘Nixonian madman theory’ – convince the other side that you are mad enough to do anything and they will back off

Mr Johnson even admitted last night that the Bill does not actually tackle the threat of a food ‘blockade’ of Northern Ireland.

But, whether by accident or design, there are tentative signs that the row might just have jolted the negotiations into life.

For all the sound and fury, Brussels has not walked away from the negotiations. In fact, additional informal talks are taking place this week. Lord Frost has been complaining for weeks about the EU’s refusal to move on from the vexed issues of fishing and state aid.

UK sources say that, despite the row, last week’s negotiations were ‘the best for months’, with Mr Barnier finally relenting and allowing discussion of some of the easier-to-solve issues.

In the eyes of many, the threat to break the law is a step too far. But there is just a chance that it might pay off and deliver a deal that could resolve the Northern Ireland issue once and for all.

Angry EU threatens the City of London over its £150billion a day trade in euros

By James Salmon Associate City Editor for the Daily Mail

The EU is retaliating in the Brexit divorce battle by delaying the decision on whether the City of London can continue to handle vastly lucrative euro transactions.

The warning shot against Boris Johnson’s plans to breach part of the Withdrawal Agreement threatens the clearing house trade in euros on the London Stock Exchange – amounting to more than £150billion every day.

Clearing houses stand between the two sides of a trade to ensure its smooth completion. They have also long been a battleground between Britain and EU lawmakers, with Paris and Frankfurt keen to exploit Brexit to challenge London’s dominance of the financial markets.

EU leaders believe the bulk of the clearing for its currency should reside in the eurozone and be regulated by its own European Central Bank.

The warning shot against Boris Johnson¿s plans to breach part of the Withdrawal Agreement threatens the clearing house trade in euros on the London Stock Exchange ¿ amounting to more than £150billion every day

The warning shot against Boris Johnson’s plans to breach part of the Withdrawal Agreement threatens the clearing house trade in euros on the London Stock Exchange – amounting to more than £150billion every day

Currently the London Stock Exchange clears 90 per cent of euro interest rate swaps, a financial contract heavily used by companies on the continent to shield themselves against unexpected moves in borrowing costs.

Britain had been offered ‘time-limited’ access to euro derivatives clearing from January to avoid huge disruption to financial markets. The European Commission was due to decide whether to continue with the arrangement later this week, but is now expected to delay it until around the end of the month. The delay has infuriated Brexiteers and alarmed the City.

Andrew Bridgen, Tory MP for North West Leicestershire, said: ‘Given that the EU breaches the withdrawal agreement by not negotiating in good faith and threatening to ban UK food exports to Northern Ireland, this latest response makes we wonder why were even trying to do a deal with these people. They clearly don’t want to do a trade deal.’

Allie Renison, head of trade policy at the Institute of Directors said: ‘The euro clearing decision has been a sore point in negotiations. Delaying the decision spells uncertainty for firms on both side of the Channel. Business leaders want to see the talks stay constructive and will be concerned that time is running out.’

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