Johnson gets new boost in race to become UK prime minister

Credit: REUTERS/TOBY MELVILLE

Boris Johnson got a fresh boost in the race to become Britain's prime minister on Tuesday when a another former rival in the race backed him to lead the country out of its Brexit crisis.

By William Schomberg

LONDON, June 18 (Reuters) - Boris Johnson got a fresh boost in the race to become Britain's prime minister on Tuesday when a another former rival in the race backed him to lead the country out of its Brexit crisis.

Hours before the six contenders were due to be whittled down by the party's lawmakers, Andrea Leadsom declared her support for Johnson, the clear favourite.

"He is the best placed to get us out of the EU at the end of October," Leadsom, a former leader of the House of Commons who was eliminated from the contest last week, told LBC radio. "Secondly, I do believe he is an election winner."

On Monday, health minister Matt Hancock, who quit the race on Friday, also backed Johnson, despite their contrasting views on Brexit.

Johnson, a former London mayor and foreign minister, says he will take Britain out of the European Union by Oct. 31 whether or not there is a deal with Brussels to smooth the transition, potentially setting up a fight with parliament.

Sterling fell to its lowest level against the U.S. dollar in nearly six months as investors worried about the prospect of a big Brexit shock to the world's fifth-biggest economy.

"It looks like Boris Johnson is going to be the next prime minister unless there is a big surprise and that indicates a looming confrontation with the European Union," said Lee Hardman, a FX strategist at MUFG in London.

A Bank of England policymaker said he was worried about the risk of capital flight which had grown since the Brexit referendum three years ago.

"Right now the stock of foreign funding is potentially more flighty than it was in 2016," Anil Kashyap, a member of the BoE's Financial Policy Committee, told lawmakers.

Analysts have also said the scale of promises for more spending or tax cuts by many leadership contenders threaten to break Britain's existing budget targets.

Johnson has promised to cut income tax for high earners while foreign minister Jeremy Hunt says he would slash corporation tax. Environment minister Michael Gove suggests replacing Value Added Tax with a "lower, simpler" sales tax.

DEBATECHALLENGE

Candidates who do not receive the backing of more than 33 of the 313 Conservative lawmakers in Tuesday's vote will be eliminated. If all candidates have more than 32 votes, the one with the fewest is eliminated.

Johnson won the support of 114 Conservative lawmakers in the first round of the leadership contest. The result of Tuesday's second round of voting is due around 1700 GMT.

The candidates who survive the second round of voting were due to participate in a televised debate at 1900 GMT.

Johnson opted not to appear in a first debate on Sunday and stayed away from question-and-answer sessions in parliament that the other five candidates attended on Monday.

His rivals kept up their calls on Johnson to spell out his plans for Brexit in more detail.

"What I find alarming and I want to try to clarify as soon as possible, hopefully in these debates this evening, is that half the people in his campaign have got the impression that he intends to leave on Oct. 31 with no deal," Rory Stewart, Britain's aid minister, told BBC radio.

"And the other half seem to have got the impression that he's going for the softest of soft Brexits. The only way that we are going to have stability in our government, or our party or our country, is if people trust us."

Johnson's rivals hope that during Tuesday's debate he will commit more of the gaffes that have marked his career.

But, barring a major upset, he looks set to make the final two in the race. The mainly pro-Brexit Conservative Party members will cast the deciding votes in July.

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(Additional reporting by Michael Holden; Editing by Janet Lawrence and Andrew Heavens)

((william.schomberg@thomsonreuters.com; +44 207 542 7778; Reuters Messaging: william.schomberg.reuters.com@reuters.net))

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