Boris Johnson and Jeremy Hunt Stress Readiness to Quit the EU Without a Deal

(Bloomberg) -- Jeremy Hunt and Boris Johnson, the candidates competing to become U.K. prime minister next month, reiterated their willingness to take the nation out of the European Union without a deal if necessary, as both insisted they have the fiscal space to fund their spending plans.

In separate interviews that mainly saw them restate their existing positions, Hunt and Johnson both said they were the best man to reach a new deal with the EU, but that they were ready to leave without one if negotiations failed. The two are pitching for the support of hardline Brexiteers and moderate Conservatives in the party's leadership contest, which will reach its conclusion in late July.

While much of the focus in the race has been on Brexit, both candidates have also laid out ambitious spending plans to boost public services. In an interview on Sky's Ridge on Sunday, Boris Johnson, the front-runner in the race, said there is cash available to fund his proposals for tax cuts and higher spending on education and policing.

Johnson said there is “headroom available" in the Treasury for his plans, and argued that “sensible tax cuts" would boost growth and revenue. He also said he's prepared to increase borrowing to “finance great infrastructure projects.”

When pushed, Johnson once again refused to rule out suspending Parliament to push through a no-deal exit, although he said it wasn't something he liked the idea of -- a repetition of the stance he took on Friday. He also took responsibility for the vote to leave, and said he was able to “lead us out of this mess.”

Speaking in a BBC interview later, Hunt said his plans to cut corporation tax could help boost growth and unlock money for spending. He said he could use the fiscal headroom in the Treasury to boost spending, although he admitted that a no-deal Brexit would mean he wouldn't have the money “at his fingertips,” and his spending pledges would be delayed.

In another move that would appeal to Brexiteers, Hunt said in an interview with the Sunday Times that he could withhold some of the 39 billion-pound ($50 billion) “divorce bill” from the EU in a no-deal scenario.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, James Amott, Srinivasan Sivabalan

©2019 Bloomberg L.P.