Prime Minister launches task force to talk tough on trade with Brussels as Brexit D-Day looms 

Boris Johnson has signalled his determination to face down Brussels in 2020’s crunch post-Brexit talks

Boris Johnson has signalled his determination to face down Brussels in 2020’s crunch post-Brexit talks by setting up a new Downing Street unit to spearhead negotiations.

The establishment of Taskforce Europe is at the top of the ‘to do’ list being drafted by Mr Johnson from the beaches of Mustique where he is spending the New Year as he prepares for Brexit next month and – he has promised – a trade deal with the EU by December.

Also high on Mr Johnson’s list are a Budget which could lead to a hike in Capital Gains Tax, a radical reorganisation of Whitehall departments and a mass Cabinet cull expected to lead to Michael Gove being given overall charge of global trade talks.

The new taskforce, which will be headed by the Prime Minister’s chief Brexit negotiator David Frost and is intended to be operational by Brexit Day on January 31, comes as new EU Commission president Ursula von der Leyen questioned Mr Johnson’s timeframe for striking a deal by the end of next year.

The establishment of Taskforce Europe is at the top of the 'to do' list being drafted by Mr Johnson from the beaches of Mustique (pictured) where he is spending the New Year

The establishment of Taskforce Europe is at the top of the ‘to do’ list being drafted by Mr Johnson from the beaches of Mustique (pictured) where he is spending the New Year

Ms von der Leyen set the fractious tone for the coming months by saying this weekend that she was ‘very worried’ by Mr Johnson’s timeframe for trade talks and suggested that the Brexit ‘transition’ period – which would see Britain locked inside the single market and customs union – could be extended until 2023.

‘We should seriously ask ourselves if all these negotiations are possible in such a short time,’ she said. ‘I think it would be reasonable to take stock mid-year and, if necessary, agree on an extension.’

A Government source said Mr Frost’s unit, which will be based in No 10, would be focused on hitting Mr Johnson’s end-of- year deadline.

Also high on Mr Johnson's list are a Budget which could lead to a hike in Capital Gains Tax and a mass Cabinet cull expected to lead to Michael Gove (pictured) being given overall charge of global trade talks

Also high on Mr Johnson’s list are a Budget which could lead to a hike in Capital Gains Tax and a mass Cabinet cull expected to lead to Michael Gove (pictured) being given overall charge of global trade talks

‘In 2020, we will move forward to establish a future relationship and free trade agreement with the EU,’ the source said.

‘Following the Election, the Government has a clear and renewed mandate to achieve this. We want our new relationship to be based on an ambitious free trade agreement and a close friendship between sovereign equals.’

And Government sources put Ms von der Leyen’s comments down to ‘tactics and bluster’, suggesting that any ‘genuinely held concerns about timing’ should have been aired by the EU when Mr Johnson forged his new Brussels deal in the autumn. 

But speaking to the French newspaper Les Echos, the EU chief also caused alarm among Eurosceptic Tory MPs by indicating that the UK must stay aligned with EU trade standards as part of the new deal.

She said: ‘If we want to benefit from the prosperity of the single market, to access it without barriers or customs duties, we must all accept its common principles and values. Otherwise, the two parties must agree on the barriers to be put in place.’

Meanwhile, Ministers fear Mr Johnson could sack up to a third of his Cabinet in his post-Brexit ‘St Valentine’s Day Massacre’ reshuffle. 

Flamboyant Attorney General Geoffrey Cox and Business Secretary Andrea Leadsom are tipped for the chop, while Chief Secretary to the Treasury Rishi Sunak and Security Minister Brandon Lewis are likely to join Mr Gove on the promotion list.

As reported in last week’s Mail on Sunday, Mr Johnson’s influential adviser Dominic Cummings is behind plans to strip control of prisons, probation and sentencing from the Justice Department, handing it instead to Home Secretary Priti Patel – and at the same time removing immigration from the Home Office and placing it in a stand-alone department.

Flamboyant Attorney General Geoffrey Cox (pictured) and Business Secretary Andrea Leadsom are tipped for the chop

Flamboyant Attorney General Geoffrey Cox (pictured) and Business Secretary Andrea Leadsom are tipped for the chop

This newspaper has also learned that Mr Cummings is studying plans to redefine what Britain’s vast £14 billion foreign aid budget can be spent on. 

Under the UK’s legally binding commitment to devote 0.7 per cent of the nation’s GDP to international charity, that spending is currently bound by strict Overseas Development Aid definitions.

It is understood that a ‘new British standard of aid spending’ has been under consideration that could see the budget shared more widely across Whitehall, including with the Ministry of Defence.

Such a move could even see some aid spending count towards Britain’s Nato commitment to devote two per cent of GDP to defence.

One Cabinet source said: ‘It’s our money and it is up to us how we spend it.’

International aid and the role of DFID (the Department for International Development) are set to be key parts of a review into Britain’s standing in the world led by Professor John Bew.

However, Downing Street has been warned that the total abolition of Dfid would spark a significant backlash from officials and the charity sector.

Attention is also turning to March’s Budget, with Treasury insiders warning that a slew of Election pledges made by the Tories will have to be funded by tax changes. However, the Tory manifesto prohibits rises in income tax, National Insurance and VAT.

Instead, is understood a hike in Capital Gains Tax has been mooted by Treasury officials. Currently, the tax on the profit from the sale of second properties is set at 28 per cent, with tax on the profit on the sale of other capital assets set at 20 per cent.

The Mail on Sunday also understands that Entrepreneurs’ Relief – which sees business creators pay only ten per cent tax when they sell their business – could be scrapped.

Last night, a Treasury official dismissed the claims as speculation and warned that no final decisions on the Budget had been made.

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