Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain’s economy into a recession, roil financial markets and weaken London’s position as the pre-eminent international financial centre.
Sterling tumbled to a 28-month low on Monday.
Johnson’s bet is that the threat of a no-deal Brexit will persuade the EU’s biggest powers – Germany and France – to agree to revise the Withdrawal Agreement that Theresa May failed three times to push through the British parliament.
“The Withdrawal Agreement is dead, it’s got to go. But there is scope to do a new deal,” Johnson told reporters in Faslane, Britain’s nuclear submarine base on the Clyde in Scotland.
“We are going to go ahead and come out of the EU on October 31.”
When asked about his remark during the campaign for the party leadership that the odds on a no-deal Brexit were a million to one, he said: “Provided there is sufficient goodwill and common sense on the part of our partners, that is exactly where I would put the odds.”
Johnson also said that the Irish border backstop, designed to prevent the return of a hard border between Ireland and the United Kingdom’s province of Northern Ireland, was “no good, it’s dead, it’s got to go”.
Under the backstop, the UK would remain in a customs union with the EU “unless and until” alternative arrangements are found to avoid a hard border.
The 27 other EU members, though, say publicly and privately that the divorce settlement, including the backstop, is not up for barter. Many EU diplomats say they believe an election in Britain is highly likely.
If Johnson goes for a no-deal Brexit, some British MPs will attempt to stop him, possibly collapsing his government. If they try to thwart Brexit, an election becomes much more likely.
Foreign Secretary Dominic Raab said London was “turbo-charging” no-deal preparations and cast the bloc as “stubborn” but denied he was threatening a bloc whose $US15.9 trillion ($A23.0 trillion) economy is nearly six times that of the UK’s.
Johnson made his first visit to Scotland as prime minister on Monday, visiting HMS Victorious, one of Britain’s four Vanguard-class nuclear submarines.
His promise to deliver Brexit, with or without a deal, has put him at odds with some in his party who oppose a “no deal” exit, including its Scottish leader Ruth Davidson.
“She is right to think that we should be going for a deal, not no deal,” Johnson said.
“If our partners won’t move, won’t take out the backstop, won’t even begin to change that Withdrawal Agreement, they won’t compromise at all, then of course we have got to get ready for no deal.”
Gordon Brown, a Scot and a former prime minister, said this month Johnson might be the last UK prime minister as he could be on a collision course with Scottish nationalists.
Johnson, who met Scottish First Minister Nicola Sturgeon, rejected a fresh referendum on Scottish independence after Scots voted 55 per cent-45 per cent to remain in the UK in 2014.
“This was a once-in-a-lifetime, once-in-a-generation thing, everybody was told that,” he said. “It was on that basis that they cast their votes and I think it would be totally wrong now to break that promise to the people of Scotland and the UK and have another referendum.”
Sturgeon said Johnson was heading for a no-deal Brexit and warned Brexit would have an impact on the timing of a future referendum on Scottish independence.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help InDaily continue to uncover the facts.