(Bloomberg) -- Today in Brexit: Conservative members of Parliament hold the first ballot to choose Theresa May’s successor

What’s Happening?

Tory members of Parliament start voting today on who should be the next prime minister, and it’s not very clear what the frontrunner thinks about the most pressing issue of the campaign: What would he do if he can’t do a deal.Boris Johnson launched his campaign on Wednesday in serious mode: he said no-deal was a “last resort,” and it’s not the option he’s aiming for. He sounded friendly toward the European Union and optimistic that leaders on the other side would work with him. He made conciliatory noises to business, which overwhelmingly wants the exit to be smooth, and promised he would work for a “sensible, orderly” divorce. The pound edged higher as he seemed to suggest that no-deal would be more a negotiating tactic than a policy option.

The tone was in sharp contrast to an interview just days earlier, in which he threatened to rip up the divorce deal and withhold the bill until Brussels changes the terms.  

But the Times reports today that Johnson has privately told Brexit hardliners that he will leave open the option of suspending Parliament to push through a hard exit. That’s after he told members of Parliament that he was “strongly not attracted” to the idea. That oddly-worded phrase leaves plenty of wiggle room.

In fairness, it’s not very clear what Johnson’s main rivals would do either if they fail to get a better deal. Foreign Secretary Jeremy Hunt has been particularly hazy on the role of the no-deal threat. But Johnson is the favorite for now and probably the most hardline of the frontrunners, so his view gets more scrutiny.

In this race, there are two electorates the candidates need to appeal to: first the MPs in their own party – whose opinions on Brexit span the full spectrum – then the 160,000 Tory members, who are overwhelmingly pro-Brexit and in favor of a hard split. That goes some way to explaining Johnson’s shifting tone – from redblooded Brexiteer to sensible statesman. 

The trouble for Johnson is he has a reputation as a politician who can’t be trusted – an accusation he brushed off on Wednesday. The shifting rhetoric doesn’t help.

Today’s Must-Reads

  • Boris Johnson defended his right to offend, but his free-wheeling speaking style could still undo him, writes Robert Hutton 
  • Johnson’s ascent is worrying those living on the Irish border
  • ICYMI: Where all the candidates stand on Brexit

Brexit in Brief

Opposition Fail | A Labour-led effort to seize control of the parliamentary agenda as a first step to blocking a no-deal Brexit failed, pushing the pound lower. Anti-Brexit Tory Dominic Grieve said there probably wouldn’t be another chance, but lawmakers have forced the agenda before, with the help of Speaker John Bercow. They also have the “nuclear” option of bringing down a government that was pursuing no-deal. Impossible Task | Chancellor of the Exchequer Philip Hammond said at a Bloomberg event that it will be “very difficult or impossible” to leave the EU on Oct. 31. The next prime minister will run into the same problems in Parliament and in Brussels that May faced, he said.Yesterday’s Man | Home Secretary Sajid Javid launched his campaign Wednesday. “Boris Johnson is yesterday’s news, he’s been around a long time,” Javid said. “It’s not just about the message, it’s about the messenger, too.”

Brexit Party Funding | The Electoral Commission said there was a “high and on-going risk” that Nigel Farage’s Brexit Party receives and accepts “impermissible donations.” The body has made recommendations to the party on a fundraising structure that would “help it comply with its legal requirements.”

EU Ready | The European Commission gave an update on its contingency plans for a no-deal Brexit. It’s broadly satisfied with the work that’s been done across the bloc’s 27 countries, but warned insurance companies they need to step up. It’s not planning any further no-deal steps and is ready for what it calls a “possible, although, undesirable, outcome.”

Brexit Respite | The U.K. housing market steadied in May as the delay to the nation’s Brexit process helped arrest a decline in new-buyer interest. But indicators for sales and new instructions remain negative, while near-term expectations are also for more declines.

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To contact the author of this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net

To contact the editor responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Leila Taha

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