UK PM to outlaw Brexit extension beyond 2020

Johnson chaired his first cabinet meeting since last week's crushing election victory. [AFP]

British Prime Minister Boris Johnson was seeking Tuesday to outlaw extending the Brexit transition period beyond the end of 2020, as he prepared to put the EU divorce deal before MPs.

Johnson won a big majority in last week's general election on a promise to "get Brexit done" by taking Britain out of the European Union by the end of January.

A transition period will then follow, during which London and Brussels hope to negotiate a trade agreement before the end of December next year.

European leaders have said the 2020 deadline would be too tight to complete a comprehensive deal, reviving fears of a "no-deal" outcome that could cause fresh uncertainty and chaos.

That was enough to pull the pound sterling lower in late trading in New York.

Johnson held his first cabinet meeting since the election on Tuesday, welcoming back his ministers after what he called a "seismic" result.

"The voters of this country have changed this government and our party for the better and we must repay their trust now by working flat out to change our country for the better," he said during the meeting at his Downing Street office.

"We should have absolutely no embarrassment in saying we are a people's government and this is a people's cabinet."

Johnson said senior ministers needed to work "flat out" to repay the trust of traditional Labour voters who switched to his centre-right Conservatives.

The government's agenda should be focused on social justice, better infrastructure and "extending opportunity across the whole of the United Kingdom", he added.

House of Commons returns

Parliament returns on Tuesday and Johnson plans to put the EU Withdrawal Agreement Bill before MPs on Friday after Queen Elizabeth II sets out the government's legislative programme on Thursday.

But the government is planning to block the transition period from going beyond the end of 2020.

"Last week the public voted for a government that would get Brexit done and move this country forward -- and that's exactly what we intend to do, starting this week," a Downing Street source said.

"Our manifesto made clear that we will not extend the implementation period and the new Withdrawal Agreement Bill will legally prohibit government agreeing to any extension."

But Irish Foreign Minister Simon Coveney warned: "I think the EU will find it strange that the UK is essentially closing off options that it itself could use later on in the process should they choose to.

"I mean, nobody's forcing the UK to apply for an extended transition period, but they have the option to do it if they want to," he told RTE.

Sam Lowe, from the Centre for European Reform think-tank, said there would a lot of "performance theatre" from the government in the next six months to fulfil his Brexit pledge.

"The landing zone for the negotiation probably won't emerge until later next year," he wrote on Twitter.

"For a deal to be reached in the space of 11 months, the UK will need to concede to most of the EU's demands. Politically, Johnson can't concede without having put up a jolly good fight first, and alternative needs to be something worse.

"So, the script for next year is written."

Sterling slides

The pound sterling currency sank on no-deal Brexit fears after Johnson's move to outlaw any extension to the Brexit transition period.

At about 1000 GMT, the pound was down 1.25 per cent at $1.3165, compared with late on Monday in New York. The euro surged almost 1.3 per cent to 84.65 pence.

The British currency had surged late last week after Johnson's governing Conservatives won the snap election, which was called to resolve the Brexit impasse.

Andy Scott, an analyst at financial services group JCRA, said sterling's "impressive gains" since the election result had been completely wiped out.

"Sterling was slammed into reverse," he said.

"By outlawing an extension, it leaves very little time in which to agree a comprehensive free trade agreement with the EU and means the clock is now ticking down to a firm cliff-edge (no-deal Brexit) next December."