Going, going ...

“He's a most notable coward, an infinite and endless liar, an hourly promise-breaker, the owner of no one good quality worthy your lordship's entertainment”

All's Well That Ends Well, Act III, Scene VI

Nothing became his tenure like the leaving of it

Six years ago Boris Johnson made the fateful decision to back Brexit, giving a rocket-propelled surge to his career which eventually led to Downing Street. The rocket has now run out of fuel. His career, having reached its zenith, is plunging back to earth and the blond bombshell who has run roughshod over Britain’s constitutional niceties for three years finally exhausted the patience of his Tory Party supporters. All this was predictable. As I pointed out three years ago when Johnson took up residence in Downing Street, “sometimes you need adults guarding the liquor cabinet. Johnson is akin to the alcoholic who has just been given the keys to a brewery and I fear it will not end well.”

Johnson has now resigned as party leader but plans to remain in place as Prime Minister until a new leader is elected, which could take a couple of months. Given the magnitude of the economic problems Britain – indeed, the world – faces over the coming months, this is not a satisfactory arrangement and there is a large swathe of the party which finds it unacceptable. Contingency plans are required to deal with the prospect of recession and the impact that sky-high energy prices will have on living standards, not to mention the very real prospect that European economies will face serious gas shortages over the winter. The likelihood that the Conservative Party will be absorbed by the contest to choose a fourth leader in six years suggests it will be all too easy for the government to take its eye off the ball.

At least an end to the chaotic Johnson government is in sight. Like Silvio Berlusconi, who dominated Italian political life between 1994 and 2011, Johnson sucked all the air out of the room by being the centre of attention rather than the calm centre of competent government. Indeed, his resignation speech was, in the words of journalist Paul Waugh, “a study in reluctance bordering on petulance.” Unlike Berlusconi, it is difficult to imagine Johnson returning as PM. 

But the extent to which matters will improve once he is gone is an open question. A large proportion of moderate Tory MPs who urged a softer Brexit than Johnson’s government delivered were expelled from the party in 2019 and the current intake reflects a more ideological strand of Conservatism. We should also not forget that many Tory MPs aided and abetted Johnson as he lied his way through three years of “getting Brexit done”, mismanaging a pandemic and straining the very fabric of the United Kingdom. This excellent post by Philip Stephens reminds us that the next Prime Minister has a big job on their hands to restore some of the trust in government that Johnson managed to squander. Nonetheless, a disciplined government which is focused on the job at hand will be a great improvement on the car crash approach adopted by Johnson over the last three years.

A new start

Whoever the next PM is, whether Conservative or even a Labour representative following a snap election, the process of political and economic healing begins on Day One of their term. The first task should be to start repairing relationships with the EU. This may be easier said than done, depending who succeeds Johnson. Whilst some of the likely candidates continue to espouse hardline positions on relations with the EU, the easiest fix would be to call a halt to prospective unilateral changes to the Northern Ireland Protocol. Although a Bill proposing such changes is proceeding through parliament, there is nothing to stop a new administration pulling it from the agenda. At the very least, adopting a more conciliatory approach will make it slightly easier for the UK to achieve any changes it may wish to make.

Taxation is a big issue for many Conservative MPs and many were deeply concerned that former Chancellor Rishi Sunak raised taxes to their highest level since the 1940s. They are consequently desperate to see a return to a “traditional Tory” low tax regime. A responsible Chancellor should resist calls for radical tax cuts. The release yesterday of the OBR’s Fiscal Risks Report made it clear that a “riskier world and ageing population ultimately leave the public finances on an unsustainable path.” Demographics will prove to be a major long-term fiscal headwind as the population ages, whilst a fall in the birth rate and the expectation that Brexit will reduce immigration will combine in the long-term to raise the old-age dependency ratio. In addition, the commitment to net zero will result in lower hydrocarbon taxes (notably fuel duty and vehicle excise duty). Whatever the UK’s current economic ills, and there are many, as Chris Giles put it in his latest FT piece, “cutting taxes will not magically improve the UK’s economic performance. Any politician suggesting otherwise is lying to you."

More thought needed on the future of the political process

The Johnson era – and to some extent the previous May parliament – highlighted the extent to which political arrangements depend on convention rather than codified rules. What the constitutional historian Peter Hennessy called “the good chaps” theory of government is well and truly dead. Whilst not necessarily arguing for a written constitution – just look at the problems that have resulted in the United States – there is a strong case for imposing limits on the power of central government. The passing of the Election Act, for example, has brought the independent Electoral Commission’s strategy and policy under government control which can only be seen as a power grab. Governments must remain open to independent scrutiny.

There is also increasingly a case for reforming the House of Lords. The current system has worked well for hundreds of years but it has increasingly become a place of patronage and the award of a peerage to Evgeny Lebedev is particularly controversial. During Johnson’s term of office, his government elevated 86 members to the peerage accounting for 11% of the total (767). During David Cameron’s six year term, his government created 243 life peers. The case for an elected second chamber has been strengthened by recent research suggesting that political donations are a strong guarantee of a seat in the Lords.

Then there is the vexed question of how MPs should be rewarded – a subject I touched on some time ago. There is a strong case for paying MPs more and banning all outside sources of income in order to eliminate disputes over conflicts of interest that dogged Johnson’s term. The funding of political parties is another issue that perhaps ought to be looked at (but almost certainly won’t be). Many European countries permit systems of public funding and whilst it is fraught with difficulties, if such a system could limit the volume of dark money flowing into British politics, it is an issue that should at least be looked at.

Last word

Over the years I have been consistent in my view that Johnson is unsuited to high office and have pointed out that his tenure has coincided with a deterioration in the quality of governance. Yet despite the relief that Johnson is about to depart, we should be careful what we wish for. I have repeatedly made the point that he is a symptom, rather than the cause, of an erosion of standards in public life. Many prominent Conservatives have noted that the party currently reflects a nationalist, ideological streak that is at odds with the pragmatism for which it was noted. This does not bode well for a restoration of better relationships with the EU. Nor is there any sign that it will take seriously the needs of the economy. But take it seriously they must, for as The Economist noted this week, “Britain is in a dangerous state. The country is poorer than it imagines ... With Mr Johnson’s departure, politics must once more become anchored to reality.”

Boris of the Thousand Days

Boris Johnson today celebrates 1000 days as Prime Minister. A lot has happened in the 28 months since he won a whopping majority in the 2019 general election. An opinion poll published in The Times yesterday asked a nationally representative sample of the public what they think of the Prime Minister with 72% of the responses portraying a negative view of him (the results are portrayed in the word cloud shown above, source here).

It is difficult to articulate the sense of division within the UK that has grown during his term of office as the government deviates further from the norms of fairness and adherence to the rule of law which have traditionally underpinned the British state. Some of the actions by members of government in recent months were reminiscent of what the British media used to gleefully refer to as a failed state. This excellent blog post by Chris Grey got as close as anything I have seen recently to putting into words the current state of the nation, arguing that post-Brexit Britain “is going metaphorically and literally rotten.” For an audio description articulating the views of many, I recommend this BBC clip (starts at 33:57) reflecting the barely suppressed anger felt by the constitutional historian and peer Peter Hennessy who called Johnson “the great debaser of public and political life” who has turned the office of prime minister into “an adventure playground for one man’s narcissistic vanity.”

Quite how we have got to this point reflects a complex mix of factors. It is easy to point the finger at the Brexit referendum as the primary trigger but in some ways this was merely a catalyst for the discontent that had been burning for many years. The Euroscepticism inherent in  the Conservative Party perhaps reflected the frustration that the Thatcherite revolution was cut short by the defenestration of the Blessed Margaret in 1990. After all, she became a virulent Eurosceptic just before her departure from office and maintained this view throughout her post-Downing Street political life. Discontent was further stoked by Tony Blair’s ill-judged decision to commit military forces to the US invasion of Iraq which did a lot to undermine trust in government. The parliamentary expenses scandal of 2009 and the failure of the economy to rebound quickly following the GFC in 2008-09 were further triggers of discontent, whilst the misguided austerity policy of the post-2010 Cameron government did much to erode the living standards of the less well-off in society.

But Brexit did give the keys to the kingdom to a new generation of politicians determined to overthrow the status quo and not be bound by the conventions of the past. This has resulted in apparent disdain for the principle of personal accountability with no actions apparently deemed out of bounds unless expressly proscribed by the law – and often not even then. Boris Johnson clearly has no intention of resigning despite the fact he has lied to parliament, the sanction for which according to the Ministerial Code is that “Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister.” It does not say what happens when the PM is the miscreant. Furthermore, Johnson has now become the first prime minister to be found guilty of a criminal offence whilst in office after he breached the Covid restriction laws that his government implemented. 

I have argued previously that Johnson is merely a symbol of the rot at the heart of the system rather than the primary cause. Indeed the credibility of the man tasked with overseeing the nation’s finances has also been battered by recent events. In addition to being fined for breaching Covid restrictions, it has emerged that Chancellor Rishi Sunak’s wife, Akshata Murty, was registered as non-domiciled for tax purposes. This means that she does not pay British tax on her considerable foreign earnings – estimated at £11.5 million per year at the last count. Whilst her actions are not illegal, this is a PR disaster given that her husband has just raised taxes on working people following the recent rise in National Insurance Contributions. Sunak tried to argue that it is not fair to use his wife as a political pawn. However, non-dom status is granted on the basis that Ms. Murty does not consider the UK to be her permanent home (she is an Indian citizen) which would be fine except she is married to a man who has ambitions to be prime minister. To add insult to injury, it emerged that Sunak himself was the holder of a US Green Card, one of the conditions for which is that applicants must declare an intention to eventually become a US citizen. 

It is not a good look for a man seeking to occupy 10 Downing Street and called to mind Theresa May’s 2016 Tory Party conference speech: “if you believe you’re a citizen of the world, you’re a citizen of nowhere.” Whilst I do not agree with May’s sentiment, I recognise irony and conflict of interest when I see it.

The current government’s signature policy was to “get Brexit done.” However there is no evidence that it is working as its proponents intended. The subsequent behaviour of government can thus perhaps be explained by its efforts to distract opponents from policy failures by throwing up a smokescreen of outlandish policies to appeal to its supporters which in turn is bolstered by the loud opposition this generates. Its most recent plan to deport refugees to Rwanda has stirred up a huge furore – not the least of which is the cost – which continues to distract attention away from other big policy issues (managing the fallout from the Ukraine war, relationships with the EU and the state of the economy to name three).

All this matters – as I have said many times before – because effective governance is the bedrock of a representative democracy. It is also a crucial underpinning for a market economy. Governments perform a wide range of functions, even in economies which pride themselves on their adherence to market principles. They regulate financial markets; manage the monetary system; oversee market competition laws; protect consumers; negotiate trade agreements and enforce technical standards for products. And that is before we consider their role in collecting taxes and overseeing the infrastructure on which we all rely. How governments act and the signals they send are thus important. Obviously it is impossible to keep politics completely at arm’s length but the more political interference, the less efficiently the economy operates. It is important to highlight that this is not an argument for an absence of government regulation: It is an argument for minimising the impact of politics on the operation of governance.

It is rather depressing to have to continue pointing out basic failings in the conduct of the British government, particularly when there is no indication that matters are about to improve anytime soon. Despite 1000 days behind him as Prime Minister, Johnson still technically has 1012 days until the UK needs to hold another general election. Whether he can survive that long is moot. Quite how much difference it would make to the quality of governance if he were to be replaced is also questionable.

"Life was never better than in 1963"

According to the poet Philip Larkin “So life was never better than/In nineteen sixty-three.” It was a year when Martin Luther King delivered his “I have a dream” speech and the year when the Beatles emerged to light the touch paper of the 1960s social revolution. It was also a highly tumultuous year which saw increased American involvement in Vietnam and the assassination of John F. Kennedy. Here in the UK the Profumo Affair caught the public imagination in which a cabinet minister was revealed to be having an affair with a woman who was also involved with a Soviet naval attaché, thus posing a potential national security risk.

The Profumo scandal severely dented public confidence in the government and rumours swirled that senior members of the Royal Family were also caught up in this messy web (sounds familiar). The establishment attempted to close ranks to protect the status quo but something in Britain profoundly changed. The author Pamela Cooper concluded three decades later that “it wouldn't be too much to say that the Profumo scandal was the necessary prelude to the new Toryism, based on meritocracy, which would eventually emerge under Margaret Thatcher.” The historian Richard Davenport-Hines suggested that “authority, however disinterested, well-qualified and experienced, was increasingly greeted with suspicion rather than trust.”

Something similar is stirring today with a “last days of Rome” feeling to the UK public debate. Just as voters in 1963 were increasingly out of tune with politicians who had come of age during the Edwardian era, many people today are expressing outrage as revelations of the government’s behaviour during the pandemic come to light. We can even stretch the parallels a bit further. In 1963 the Conservative government was about to celebrate 12 years in office; was onto its third prime minister (Churchill, Eden and Macmillan), with a fourth (Douglas-Home) set to take over before the year was out, and had engaged in a disastrous international excursion in the form of the Suez Crisis. Fast forward to 2022 and the Conservatives are into their twelfth year in office; have had three prime ministers (Cameron, May and Johnson) and have engaged in a colossal economic gamble in the form of Brexit. History does not repeat itself; it may not even rhyme all that often, but the lessons of the past suggest that this is not going to end well.

The playwright Arthur Miller penned the line “you can quicker get back a million dollars that was stole than a word that you gave away.” This goes to the heart of the government’s troubles: It has lost the trust of the electorate. The same thing happened to John Major’s government following sterling’s departure from the ERM in 1992. Boris Johnson today epitomises that lack of trust. Ironically, the foreign press has always tended to see through him in a way that the British press has not. This week the European press went for the jugular with the Süddeutsche Zeitung suggesting that “Johnson does not govern: He merely plays at being premier.” Jyllands-Posten in Denmark commented that “The garden party is over for Boris Johnson” and pointed out that “it's like reading Animal Farm all over again - Orwell's satirical fable about the Soviet Union under Stalin: all animals are equal, but some are more equal than others.” Perhaps one of the most damning pieces was that published in the New York Times which accused Johnson of something worse than incompetence: A full scale “assault on civil liberties” and an “authoritarian assault so comprehensive that once settled as law, it will prove very tricky to unpick.”

It is ironic that drinks parties during lockdown should provoke such outrage whereas constitutionally outrageous actions such as proroguing parliament or the unlawful fast-tracking of PPE contracts to those with political connections were shrugged off. Nor has the assault on civil liberties outlined by the NYT had much impact. So why now? After all, it is not like Johnson’s actions come as any surprise to those who know him. He is clearly temperamentally unsuited for the highest office. Moreover, governments routinely break their electoral promises. It is not as if this government is any worse than many others on that score.

To get to the heart of the matter we ought to draw a distinction between political sincerity and political accuracy. In this framework, voters identify with politicians who reflect their beliefs (the sincerity effect) and are prepared to overlook factual inaccuracies – beliefs after all cannot be proven. Conversely, politicians who try to make a rational case find it more difficult to get through to voters if there is no meeting of minds. This is just a formal way of saying that people will believe what they want to believe, but it makes sense. Johnson was able to use the Brexit issue to propel himself to the political forefront by speaking to large parts of the electorate which were able to tune out his obvious failings. As the old saying goes, if you can fake sincerity you’ve got it made.

On the question of lockdown parties, Johnson was way out of  tune with the electorate. Voters sincerely believed they were doing the right thing by adhering to the Covid rules and were prepared to make the necessary sacrifices, including not being able to tend to loved ones that were dying. Perhaps if the government had come clean at the start rather than trying to pretend there was nothing to apologise for, it might – just might – have been able to ride this crisis out. It would at least have had a chance of maintaining its political sincerity.

Short of a miraculous turn of events, it is hard to see Johnson coming back from this (which calls into question my forecast that Johnson would still be in office at the end of 2022). As to what happens next, your guess is as good as mine. The so-called independent inquiry into gatherings at Downing Street (terms of reference here) represents an investigation by a civil servant into the actions of people she ultimately reports to. It is compromised before it has begun. Whatever the outcome, there has been a certain amount of jockeying for position in the event that Johnson is forced out. But Chancellor Rishi Sunak, who has long been tipped as a possible successor, is not exactly pulling up trees with his approval ratings. Nor is any other candidate for that matter.

One of the things I wish for 2022 is less focus on politics and more on economics. After all, when the UK is struggling to come to terms with the joint economic impact of the pandemic and Brexit, it is important that the government is focused on its job rather than this side show. Yet for all that domestic politics is increasingly viewed as a soap opera (the media’s obsession with tittle-tattle over the years has not helped), we can take comfort from the fact that things do eventually heal. Events do not come much bigger that the assassination of JFK yet the US did (eventually) move on. Perhaps we should view recent events – both in the UK and elsewhere – as the turbulence that results from the swinging of the political pendulum. But the ride could get wilder still before the turbulence abates.

Start listening

Two years ago Boris Johnson won a thumping majority at a general election which produced the Conservatives’ best result since 1987. It has since been anything but plain sailing. Whilst Covid has changed both the political and economic landscape, the government has made a series of unforced errors which has called its authority into question. Effective leadership in the UK has been conspicuous by its absence of late and the issues are now beginning to cut through with the electorate. The Conservatives’ heavy defeat at the North Shropshire by-election, which until this week had returned a Tory MP to Westminster at every plebiscite since 1832, is an indication that all is not well.

It is ironic that the by-election did not need to happen at all – it was only triggered by the resignation of Owen Paterson who, if he had accepted the 30-day suspension imposed by the parliamentary Standards Committee, would still be an MP. The fact that the government tried to bend the rules to keep Paterson in place has opened up a whole can of worms, with last month’s corruption stories being supplanted by a media furore over parties in Downing Street last Christmas in breach of the social distancing regulations in place at the time. This comes on the back of the Dominic Cummings affair, when one of the PM’s senior advisers was able to flout lockdown rules. It is not just the actions of politicians which are causing the public to be restive. The police refusal to investigate the issues are straining the electorate’s credulity and patience, especially when people faced criminal charges for holding gatherings at the same time as the Downing Street event took place (this video sums up the popular view).

A government in trouble but let's not get carried away

Although the double-digit vaccine-driven Tory lead in the opinion polls at mid-year had narrowed somewhat, even in early-October they enjoyed a comfortable six point lead. This has evaporated very quickly with Labour now enjoying a six point lead. Although we should be wary of reading too much into mid-term opinion polls – all governments experience a sharp drop in support at some point – the speed of the collapse has set alarm bells ringing in government. So long as Johnson was perceived to be a political asset, his party was willing to turn a blind eye to his shortcomings. But Johnson’s public approval ratings are flagging. If press reports are to be believed, dissatisfaction with Johnson’s style of leadership is mounting in Westminster and challengers are jockeying for position in the event that a leadership contest is called in 2022. But don’t hold your breath.

For all the excitable commentary suggesting that the prime minister is in big trouble we should not allow ourselves to get too carried away. For one thing, experience suggests that prime ministers can hang on for quite some time after MPs begin to question their leadership. This was true for Theresa May and perhaps even more so for Margaret Thatcher, whose authority leached away over a prolonged period. This is perhaps even more relevant to today’s situation since she, like Johnson, was the personification of the government. My guess is that Johnson is unlikely is to be going anywhere anytime soon. A second problem is that the Tories do not have anyone with the star quality to fill Johnson’s shoes, despite the claims being made for the Chancellor Rishi Sunak. In addition, there is also a risk that the electorate may start to weary of a party that has developed an unfortunate habit of ditching its leaders – both of his predecessors either jumped or were pushed – particularly one with Johnson’s brand recognition.

Is Johnson a cause or a symptom?

In any case, there is an argument that Johnson is merely a symptom, rather than the cause, of the political malaise. Perhaps it is his party rather than just the prime minister which is increasingly out of tune with the electorate. As former Conservative minister Chris Patten recently suggested in a radio interview, “I’m not sure that this is a Conservative government. I think this is a sort of all over the place, rather chaotic English nationalist government.”

Having recently reread John Major’s autobiography I was struck by many of the parallels between the situation facing the current Conservative government and the travails of Major’s government between 1992 and 1997. Back in the 1990s, Major was undermined at almost every turn by a determined coterie of Eurosceptics which gave rise to a situation in which, to use the words of former Chancellor Norman Lamont, “we give the impression of being in office but not in power.” Although dissident Conservative MPs believed they were tapping into the well of public opinion, in reality their  obsession with anti-EU ideology was out of proportion to its importance to the general public and they paid the price at the ballot box in 1997.

The situation today is not quite the same. After all, in the last five years the Eurosceptics appear to have won their “war” with the EU but only at great cost to the institutional fabric. But they seem unable to accept the economic consequences of their actions and continue to lash out at the EU rather than coming to an accommodation as the public appears to want. The government often seems helpless in the face of Covid. Large numbers of MPs increasingly have a problem with lockdown measures to try and halt the spread of the disease, citing the primacy of personal freedom over the strictures of what one MP called the “public health socialist state.” Indeed, in a parliamentary vote earlier this week, 99 Conservative MPs voted against legislation making it a requirement to wear masks in indoor venues and it was only passed thanks to the support of the opposition. This flies in the face of evidence suggesting that the public is in favour of measures to combat the spread of the Omicron variant.

At a time when most people are trying to get on with their lives in the face of Covid, they do not have time to care about political machinations. But when they are regularly assailed with stories of failure to apply the rules consistently, they start to become restive. One of the principles of a modern democracy is that no one is above the law. Everyone has to abide by the same rules and the sheer volume of evidence to the contrary was one of the reasons for the North Shropshire result.

It may be that this is merely a short-term issue that will eventually blow over. Perhaps if the pandemic recedes in 2022 much of the anger felt today will dissipate. This makes it even more important that the government properly handles the latest wave of the pandemic. Tory MPs may object to a lockdown but public opinion suggests that there is not the same degree of opposition. As it is, large parts of the hospitality sector are already complaining that pre-Christmas trade has collapsed. The government may be forced to resurrect the furlough scheme in some form in order to provide a backstop for those whose incomes are being hit. Without some form of financial support, the Red Wall seats which the Conservatives won in 2019 may revert back to Labour. Either way, it is time for the government to start listening to those in whose name they govern, for the public do not like what they are currently seeing and hearing.

Hiding in plain sight

They say that if you are going to lie then you might as well lie big by distorting the truth in plain sight, and by so much that people cannot possibly credit that what you are saying is false. Yet when it comes to the economics of Brexit, that is exactly what is happening. All the downsides that the government was warned about are not perceived as problems: They are now being sold as features of the new system as the economy transforms from one model to another. You have to hand it to Boris Johnson for being able to deliver his closing message at this week’s Conservative Party conference with a straight face. Indeed, I have to regularly check the calendar to make sure that it is not 1 April because the British electorate are now being taken for fools.

As a former journalist, Johnson is without a doubt a great wordsmith as his conference address demonstrated. But a journalist is meant to engage in a modicum of factual reporting: Johnson’s journalism career as a reporter from Brussels was more akin to a purveyor of fiction. His speeches as prime minister are often no different. To quote the blond bombshell himself, “after decades of drift and dither this reforming government, this can-do government, this government that got Brexit done … [is] dealing with the biggest underlying issues of our economy and society, the problems that no government has had the guts to tackle before, and I mean the long-term structural weaknesses in the UK economy.” I don’t want to be overly pedantic but the Conservative Party has held office for 29 of the last 42 years (almost 70% of the span since 1979). If there has been “drift and dither” surely they have to take some responsibility for that?

To quote Johnson further, “we are not going back to the same old broken model with low wages, low growth, low skills and low productivity, all of it enabled and assisted by uncontrolled immigration.” That is an astonishing statement – and it is wrong. The evidence suggests that economic migrants tend to be better educated than the host population. In 2016 the Rand Corporation reported that “In England and Wales, for example, 23% of the working-age, native-born population has no qualifications. This compares with only 13% of migrants from [EU12] countries.” Education and training should in theory show up in total factor productivity growth – the intangible factors which are external to labour and capital inputs. Reducing the education input by turning away better educated foreign workers ought to make productivity worse in the long run and there is some evidence from the official data to suggest that between mid-2018 and end-2019 TFP actually deteriorated (chart below).

Even before the conference, business was not happy about being lectured by government on how to deal with the reduced flow of EU workers upon which they have heavily relied. Simon Wolfson, CEO of Next plc and also a prominent Brexit supporter, has argued strongly that the UK needs to import labour. As he noted in a newspaper article, “the only thing Brexit decided was that the UK must determine its own immigration policy. The vote did not decide what that system should be; nor did it determine that only those on one side of the Brexit debate should have a say going forward.”

Johnson’s answer to the queues which have built up outside petrol stations is to pay tanker drivers more in order to alleviate the underlying labour shortages. You don’t have to be an economist to work out that a pay rise not backed by productivity improvements is inflationary. Perhaps we should not expect anything more serious from a prime minister who is known for his “f*** business” message (there was a lot more truth in that quote than we knew). Beneath the bluster, there is a more serious underlying point. Brexit was meant to set UK business free to connect with more rapidly growing parts of the world and liberate it from the constraints imposed by the EU. It was after all, heavily backed by the free market lobby. What the government has instead done is to impose additional red tape by raising tariff barriers with the EU where previously there were none, and is now telling business how to operate. As Johnson put it, companies must not “use immigration as an excuse for failure to invest in people, in skills and in the equipment the facilities the machinery they need to do their jobs.” It’s a message worthy of a Soviet May Day speech in Red Square.

The think tank and business community did not respond positively to the message they heard from Johnson. The free market Adam Smith Institute, which has traditionally been a supporter of the Tory agenda, described it as “bombastic but vacuous and economically illiterate ... It’s reprehensible and wrong to claim that migrants make us poorer.” The similarly free market Institute of Economic Affairs noted: “Boris Johnson’s rhetoric is always optimistic and enterprising, but insofar as there were actual policies behind it, they seemed to involve yet more state intervention and spending.” The CBI commented, “what businesses urgently need are answers to the problems they are facing in the here and now … The economic recovery is on shaky ground and if it stalls then the private sector investment and tax revenues that the prime minister wants to fuel his vision will be in short supply.”

We always have to take conference speeches with a huge pinch of salt. They are designed to appeal to the party faithful and are not a platform for delivering policy prescriptions. But even against this low benchmark, Johnson’s vision of the post-Brexit UK economy was heavy on the feelgood factor and light on the specifics of how it can be realised. But maybe this is to miss the point of what Johnson is trying to do. As the Frankfurter Allgemeine Zeitung noted, maybe he “is not striving for Thatcherism 2.0, but for an almost Rhenish capitalism, with a caring state at the top. A Tory government under Johnson no longer wants to see itself as an extension of business, but as a "people's government" that also seeks conflict with business.”

There is no doubt that in order to deal with the economic challenges which lie ahead Johnson will have to get a large slice of the electorate onside. Whilst his economic position looks very difficult today, and it is one which has felled prime ministers in the past, we should not dismiss Johnson’s ability to generate a feelgood factor when there is little to feel good about. He is a political phenomenon. Admittedly economics is not his strong point but this has never been a hindrance to those seeking high office, as the Brexit referendum showed.

There may be trouble ahead

It's not what was done ...

I have never known such a sombre mood in the UK as that which prevails today. As if 2020 has not been bad enough, the weekend news that the government has cancelled the planned five day relaxation of social distancing restrictions over Christmas in response to rising infection rates has thrown the plans of millions into chaos. This was done with the best of intentions in the face of a new variant of SARS-Cov-2 which appears to be more infectious than previous strains. But in response more than 40 countries have, at the time of writing, placed bans on travellers arriving from the UK to limit the spread of the new variant. The most serious of these is the French decision to impose a 48-hour ban on passengers and freight entering from the UK which will severely disrupt cross-border trade.

The first reaction of many people was to direct their anger at the government. After all they were promised just three days earlier by Boris Johnson that it would be “inhuman” to ban Christmas as he defended plans to allow households to socialise over the festive period (the fact that local lockdowns in late July were announced hours before the start of the Eid festival did not go unremarked on social media). That said, we should cut the government some slack regarding the decision to impose new restrictions in the face of the most serious health crisis in a century. Many people may disagree, but the experience of the first lockdown was that it did result in a significant reduction in the spread of the disease, albeit at a very high economic cost. Those arguing that the UK should have followed the Swedish model are less vociferous in the face of mounting acceptance in Sweden that the government’s strategy was a mistake, with even the King suggesting that the policy has “failed”.

... but how it was done

A far bigger problem has been the government’s communications strategy. The decision on Saturday afternoon to add a fourth tier of restrictions to the 3-tier system with just a few hours’ notice seemed very rushed. Worse, it flew in the face of the message given just three days earlier. Since the government has known about the new Covid variant for some time, it calls last week’s comments defending previous Christmas plans into question. However, this is in keeping with the pattern which Johnson has followed throughout the year. He was late in implementing the first lockdown in March; he resisted the scientists’ calls for a national lockdown in September, instead opting for a series of badly implemented regional lockdowns, before being forced to bow to the inevitable and implementing a second lockdown in November and now the latest U-turn.

Preparing for border disorder

But it is the restrictions on the flow of goods and people across borders which are the most sobering aspect of the whole issue. Even before the events of recent days queues were mounting on both sides of the Channel as firms attempted to build up stocks ahead of disruption in the event of a no-deal Brexit. One of the consequences has been that the cost of transporting a container of goods has significantly increased, with reports that a container of goods from China to Felixstowe now costs $10,000 per load – four times the usual rate. The French border closure has made the problem significantly worse because hauliers have no incentive to enter the UK for fear of being stuck on this side of the Channel. None of this should come as any real surprise. I did point out two years ago that problems at the ports would quickly lead to large queues.

It may be that the border closure is partly motivated by the desire of the French government to fire a warning shot at Downing Street to indicate what could happen in the event of a no-deal Brexit. Contrary to what the diehards have maintained over the last four years, the UK really does not hold all the cards – it is questionable how many it holds at all. In the absence of either a Brexit deal or an extension of the transition period, this could be just a foretaste of what is to come. Latest reports from within government suggest that the UK has ruled out any Brexit extension. Given Johnson’s record on U-turns, we should not necessarily take this at face value. But if this really is the government’s position, it should brace itself for the mother of all political backlashes in 2021. It is extremely difficult to believe that voters will stand idly by whilst restrictions on cross-border traffic cause such inconvenience, resulting in higher prices and a reduction in the range of goods available for purchase.

Interestingly, a recent IMF working paper looked at pandemics across a range of countries over the period 2001 to 2018 to assess whether they lead to higher inequality and increased social unrest. It concluded that “the results from local projections show that social unrest increases about 14 months after pandemics on average. The direct effect peaks in about 24 months post-pandemic.” Add in the self-inflicted pain of a senselessly hard Brexit and I would not want to be in Johnson’s shoes in 2021.

It's nothing  personal - I just oppose incompetence

I was recently accused of peddling Anti-Tory propaganda. Since the respondent was anonymous I am sure they will not remind me repeating their response to one of my blog posts: “From the very first words of this article, it's glaringly obvious that the writer is a remoaner. The colouring of the language clearly lays a foundation for the rest of the article to be another Brexit/Tory-bashing tiresome monologue. So, it puts me off. It didn't start as balanced, so I (and I'm guessing many others) didn't read through, because they already knew the theme and conclusion of the story. Shame. There may be many salient points buried within these 1489 words, but I won't go in search for them. I have better things to do with my time.”

Whoever they are, they have missed the point of everything I have written over recent years. My criticisms are not party political (they should read what I wrote about Jeremy Corbyn). They are a response to government incompetence. It is not my intention to take pot shots at the government for the sake of it – I leave that job to the professional columnists with this article by The Observer’s Andrew Rawnsley neatly summarising Johnson’s unsuitability for leadership at a time when more than flowery rhetoric is required. As Rawnsley put it, if there is light at the end of the tunnel it  “will have to be exceedingly bright to wipe away all the memories of how long and dark, stumbling and flailing has been the nation’s journey through the tunnel.”