Boris Johnson: Dealmaker? by our experts in the UK Weber Shandwick Powell Tate Corporate Affairs Team

July 26, 2019 admin 0 Comments

Boris Johnson entered Downing Street yesterday: having addressed the world’s media, he immediately began forming his new government.

The new Prime Minister achieved a substantial victory over his leadership contender with his ‘D.U.D.’ prospectus for power: Deliver Brexit. Unite the Country. Defeat Corbyn.

Clearly, this appealed to the 90,000 Conservative Party members who cast their votes for him by a margin of 2:1 in a leadership race dominated by Brexit; a race in which he promised – “do or die” – that the United Kingdom will leave the European Union by 31st October 2019, with or without a ‘deal’.

The Cabinet he has formed is one of the most diverse and gender balanced ever, with Priti Patel appointed Home Secretary and Sajid Javid appointed Chancellor. Former Secretaries of State, such as Nicky Morgan, have also returned.

There were some surprising Cabinet departures too. Jeremy Hunt, the former Foreign Secretary and leadership contender, refused to accept a demotion; and committed leavers, such as former Defence Secretary Penny Mordaunt and former Trade Secretary Liam Fox, were shown the door.

Everything in British politics is now seen through the prism of Brexit: it has created factions and deep divisions within all major political parties in the UK. The 2017 general election left the Conservative Party dependent on the Democratic Unionist Party for a working majority in Parliament, which now consists of just two MPs.

So, unlike many of his predecessors, he enters office presiding over a fractious and divided party split coupled with a wafer-thin parliamentary majority. Such a slender majority allows for backbenchers to hold considerable sway with the government – and groupings of Conservative backbenchers within the European Research Group – or similarly the ‘Tory Remainers’ – present further challenges.

This creates big questions about the longevity of a Boris Johnson government, and will see him face many of the same difficulties his predecessor Theresa May found in delivering Brexit.

Talk is rife in the corridors of Westminster about how long the PM will be able to last without holding a general election, and many see his new Cabinet as being ‘match ready’ for one.

Weber Shandwick’s public affairs team explain what we can expect from a government led by Prime Minister Boris Johnson.

 

 

What are the difficulties he will face?

Governing will continue to be difficult 

The PM faces a deeply divided party as he enters Downing Street. Five Government Ministers resigned in protest ahead of Johnson officially taking on the role of Prime Minister, illustrating how difficult it will be for Johnson to govern even his own party.

The Government’s majority remains wafer-thin and there have been indications that a number of Conservative MPs may potentially defect to the Liberal Democrats if Johnson pursues a no-deal Brexit. There are even dangers from factions, in possible rebellions from the Eurosceptic European Research Group (ERG) over a ‘soft Brexit’.

He may face difficulty in securing the votes in Parliament to approve his budget or the Queen’s Speech which sets out his legislative agenda.

He does, however, have the advantage of a united Cabinet in relation to his central policy of leaving the EU.

The Conservative majority is increasingly fragile, and the Party is fractious 

The polarisation of opinion about Brexit within the Conservative Party in exacerbated by the slim majority Johnson has inherited.

The Party is reliant on the DUP to govern; a forthcoming by-election, and the recent suspension of a Conservative MP following criminal charges all put the party’s parliamentary majority even further in peril.

This leaves backbenchers in a very powerful position – and the PM vulnerable. He is reliant on the will of individual factions within, due to his reliance on each and every MP’s vote. In particular, there may be trouble from disgruntled former Cabinet Ministers sent by the PM to the backbenches, such as Caroline Noakes and Greg Clark.

Johnson faces an ongoing threat of a confidence motion 

The threat of a potential confidence motion vote in Parliament hangs heavy in the air.

Parliament goes into its summer break on Thursday and Conservative Party whips have put their MPs on full alert, and they are being required to attend Westminster to defend the Government against this threat should it emerge.

While, on balance, it is unlikely that Labour will take this opportunity to pursue a confidence motion so early in PM tenure – due to its potential to fail – a confidence motion from Labour is not the only threat.

The Speaker this week refused to accept a no confidence motion by Conservative MP Sir Alan Duncan – even before Boris Johnson became the PM. This reiterates the scale and breadth of the threat Johnson faces.

Parliamentary recesses may be cancelled 

Despite the likelihood that MPs will be unable to make a tangible difference to the Brexit negotiations during the summer period, the perception that Parliament is ‘on holiday’ at a time of national significance will increase calls for the PM to cancel, or at least shorten, the summer recess.

 

 

Policy pledges

The Prime Minister’s policy pledges during the leadership campaign give the indication that he will be supportive of business, and keen to cut regulation and the tax burden. This is set in a broader context of his Brexit policy – for Britain to be a global, outward-looking nation – and his wish to “energise” the country.

However, it is difficult to predict the feasibility of implementing pledges made during the campaign, particularly given the scale of the spending required to fulfil these.

We have outlined some of the key commitments below.

Brexit

As the leading light in the Vote Leave campaign during the 2016 referendum the Prime Minister is committed to Brexit and sees it as an opportunity rather than a risk to be managed.

In an interview with Talkradio’s Ross Kempsell, Johnson also said that the UK must come out of the EU by 31st October “do or die”.

If the UK was to leave without a deal, Johnson has claimed that under the General Agreement on Tariffs and Trade, Britain could use World Trade Organisation rules to avoid tariffs under a no-deal Brexit.

No Deal preparation will be increased

The appointment of political heavyweight Michael Gove to lead the government’s no-deal preparations is significant.

With Parliament on its summer break until 3rd September there is very little time to negotiate an alternative to the Withdrawal Agreement with the EU, ahead of the 31st October deadline.

It has been rumoured that the PM will also launch a no-deal ‘public information campaign’, to help minimise any possible no-deal disruption. These measures send a clear message to Brussels that Johnson is serious about leaving the EU without a deal, if necessary.

Policy Commitments:

  • The UK will leave the EU “do or die” by the 31st
  • Increase no-deal preparation
  • Launch of no-deal ‘public information campaign’ to minimise disruption

Immigration

Johnson takes a progressive view on immigration despite the central focus of it during the 2016 referendum campaign. In the past, he has advocated a points-based system, and has made clear that EU citizens in the UK ahead of Exit Day should have their rights protected.

Journalists have been briefed a big announcement will be made about EU citizens as one of his first acts as Prime Minister.

Policy Commitments:

  • Securing the rights of EU citizens who have been living in the UK up to the Brexit withdrawal date
  • Introduction of an ‘Australian-style’ points system

Taxation

During the Conservative leadership election campaign, Johnson made a number of ambitious spending commitments. In particular, his intention to raise the higher rate of income tax was criticised for benefitting higher earners, with Johnson subsequently stating that he will prioritise low earners.

The Institute for Fiscal Studies has estimated that Boris Johnson’s tax pledges will potentially cost the Treasury billions of pounds. In response to these criticisms, he claimed that there is “headroom available” for increased spending and that tax cuts will stimulate economic growth.

Policy Commitments:

  • Increasing the threshold for the higher rate of income tax from £50,000 to £80,000 at a cost of £9.6 billion
  • Lifting the threshold for National Insurance
  • Reviewing ‘sin taxes’ on sugary drinks
  • Preferential tax treatment for companies who help staff with mental health issues

These tax cuts are separate to the taxes which he indicated he would make in the event of a no-deal Brexit emergency budget, in which he would plan to overhaul stamp duty and cut regulation.

Education

During the campaign, he spoke passionately on the issue of schools funding – an issue of great concern to Conservative MPs who have suffered pressure from schools in their areas, and which may enhance support for Johnson amongst his critics.

Policy Commitments:

  • Increasing per pupil spending in primary schools to £4000 and secondary schools to £5,000
  • Introducing a £100 million ‘retraining fund’ for those already in the labour market to learn new skills

Policing

Crime and policing is an issue of particular concern to Conservative members, coinciding with a rise in knife crime across London.

Policy Commitments:

  • Recruiting an extra 20,000 police officers by 2022 – at a cost of £1.1 billion – to address the rise in crime with the ‘fiscal headroom available’

Environment

The PM has attempted to show his green credentials, tweeting that he would legislate for net zero emissions by 2050, and that he would embrace the opportunity of green growth, positioning the UK as a global decarbonisation leader.

The PM will have seen polling which shows green policies are popular with younger voters in particular. However, this contrasts with his track record on the subject: previously, he has described climate change as a “primitive fear” that is “without foundation”.

Policy Commitments:

  • The UK to be a global decarbonisation leader through achieving net zero emissions by 2050
  • Lead the world in battery technology to combat climate change
  • Produce green jobs for the future

Infrastructure

The implications of other spending commitments for large infrastructure projects, such as HS2 and Heathrow, are unclear.

The Prime Minister is a visionary and speaks fondly of large, bold infrastructure projects. Johnson has ambitiously pledged to deliver full fibre broadband to “every home in the land” by 2025 – eight years ahead of the government’s current goal – stating that the country is suffering from a deep digital divide. Openreach claims this commitment would cost £30 billion.

In contrast, he has committed to reviewing HS2, as he is sceptical of the business case. While the prospect of halting HS2 may be popular with a number of Conservative backbenchers, he may instead prioritise construction to the northern end of the high-speed rail line.

Johnson is also an opponent of a third runway at Heathrow. With a constituency under parts of the flight path, his diminished parliamentary majority in Uxbridge and South Ruslip may cause him to delay or avoid making a decision on the project.

Policy Commitments:

  • Full Fibre broadband for every home by 2025, at an estimated cost of £30 billion
  • Reviewing the business case for HS2
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