BORIS GAINS MOMENTUM
Powered by a surge of English nationalism, Boris Johnson bulldozed his way through Labour’s so-called “red wall” to a 70-seat majority in Parliament. For the first time in years, the UK will have a government that can get on and actually do stuff.
Brexit will be first on the list. Out by the 31st of January, with a trade deal (or not) by next Christmas: Jacob and his multi-millioned dream team happy; job done, box ticked. But Boris knows he needs to do more than that if he is to build lasting domination for his Tories in the north of England. He needs not only to rent those votes… he has to buy them. That means his government will need to generate growth, jobs and boost public services greatly and invest in the infrastructure. It isn’t George Osborne saying it but it sounds an awful lot like building the “Northern Powerhouse”.
Of course, building a big house usually means having a big mortgage. One of the interesting features of the election campaign was that anumber of Boris’s key cabinet colleagues effectively disappeared from view. Notable among these were Jacob Rees-Mogg and, more surprisingly, Sajid Javid. Fortunately, perhaps, this allowed Boris to tour the country promising all sorts of populist spending increases without having to explain how they are going to be paid for. Already, forecasters have said there is an £18bn “hole” in Boris’s budget. That’s not as much as the socialist shopping list Mr Corbyn had touted but it reminds us that nationalism is expensive too.
In order to deliver, Mr Johnson may follow the path of Populist in Chief, Donald Trump. That is, make a dash for growth by pulling as many of the levers in the economy as possible at (or close to) the same time. Thus expect to see an early budget that commits to increased spending on the NHS and Police along with increased infrastructure projects, partly funded by a “Brexit bonus “ and increased borrowing. That, combined with renewed fears of “no-deal” will probably result (helpfully) in some weakness in Sterling.
But the economy needs more than that to generate growing tax revenues to pay for further spending and also to reduce tax rates for both individuals and companies. It needs a supply-side boost in the form of an injection of deregulation. That’s why the rush is on to do a minimalist deal with the EU by December. Boris’s “One Nation” Conservative Party is not a tax and spend party, it’s a free-market, share the benefits of growth party. Unshackled by Brussels, the Tories believe they can reinvigorate the British economy and create a machine that runs on lower taxes, more focussed public services and a lot less bureaucracy.
If that buys Boris the votes of Northern Folk the way it bought Mrs Thatcher those of Essex Man, then the Tories can look forward to large majorities for the foreseeable future. That is, except where other forms of nationalism are strengthening....don’t write off the constitutional crisis yet.