Boris Johnson’s post-Brexit plan for Great Britain remains a puzzle

Brexit was heralded by some of its longtime proponents as a way to unleash a new dynamic in Britain by letting go of Brussels’ red tape to create a low-tax, free-running ‘Singapore-on-Thames’. Create – an expression coined by a former head of the British Treasury, Philip Hammond – sells his goods and services around the world.

But Mr. Johnson is not a free-market conservative in the form of Margaret Thatcher. So far, he has promised the British more regulation, not less, with ambitious plans to raise the minimum wage and cut greenhouse gas emissions. He has promised more state spending, not less, to “level” an economy that he believes is too dependent on London and southern England.

These policies allowed him to win big in last year’s elections in districts that were traditionally hostile to the ruling conservatives, while his staunch pursuit of Brexit alienated many of his party’s traditional allies in corporate boardrooms. All these tensions are a mystery: if Mr Johnson doesn’t want another Thatcher-esque economic revolution, what does he want to do with the British freedom of Brussels?

His first job is to deal with what could be another difficult year. Disruption of new trade deals with the UK’s largest export market threatens to hamper the economic recovery from the pandemic.

A 2019 election pledge to revive lagging regions looks tougher now that the virus has blown a hole in UK public finances.

The pandemic itself is not over yet: the country is entering the new year with a new variant of the coronavirus on the loose and increasing infections that will inevitably take a toll in the future. Even with a vaccination program on track, it will take months for Covid-19 to be under control enough to lift the economic constraints that the troubled sections of its own party are likely to continue to resist. Meanwhile, Scottish nationalists want another shot at independence.

But while Brexit is over, Mr Johnson’s long-term vision for the UK is not clear, political observers say. “He’s had the opportunity to come up with some sort of grand plan, but I don’t think he has one and I don’t think he feels he needs one,” said Simon Usherwood, a professor of politics at the US. University of Surrey.

The EU’s fear that Mr Johnson would try to create a low-tax, low-regulatory economy guided the bloc’s tough handling in the Brexit negotiations. The concern was that the UK would become a low-cost competitor on the EU’s doorstep, which could undermine European businesses because standards were lower. The EU’s response was to conclude a trade agreement under which the UK would lose tariff-free access to the block if it dropped its standards – for example, by changing the law to pollute factories more.

Mr Johnson tried to maximize the UK’s freedom of regulation of the bloc during the negotiations. But in key policy areas, his plans reflect or reinforce those of the EU, rather than undermine them.

His big election win in 2019 was on a manifesto promising to raise the minimum wage and curb corporate tax avoidance. In policy announcements related to the environment and climate change, the UK has set ambitious goals that go beyond the EU’s commitments. Meanwhile, the Bank of England has said it will not ease capital requirements and other regulations for banks.

Mr Johnson, who was the leading public face of the Brexit movement, praised Britain’s departure from the EU as a recovery of sovereignty. In speeches, he has highlighted traditional conservative priorities such as low taxes and deregulation, tougher policing and tougher immigration rules.

But he has also spoken out for traditionally left-of-the-center goals, such as generous investment in infrastructure and state support for industry, including better protection against foreign takeovers, marking a break with the free-market orthodoxy that the ruling conservatives have defended. . since Mrs. Thatcher’s premiership. He is in favor of strict environmental regulations and banned the export of live animals for slaughter.

It is not clear what form of political thought will dominate for the remainder of his tenure.

“Our plan to rebuild this country will not be blown off course,” Mr. Johnson said at this year’s Conservative Party conference, pledging to invest more in health, policing and education. But in the same speech, he warned that the state cannot act as “Uncle Sugar” forever.

The mixed political messages mean his vision of how Britain will deviate from the EU post-Brexit is blurred. The departure in November of Dominic Cummings, Mr Johnson’s top adviser and one of the masterminds behind the Brexit referendum, adds to this uncertainty.

Of Mr Johnson’s entourage, Mr Cummings had presented the most detailed vision for post-Brexit Britain. He wrote extensively about how Britain, without the constraints of EU regulations, could be more agile on issues such as climate change, immigration shifts, urbanization and the exploitation of major technology.

The vision envisioned a new state that could intervene quickly to adjust regulations to strengthen investment and innovation. He argued that Britain would maintain economic competitiveness by becoming a leading hub for scientific research and advanced industries such as artificial intelligence and green technology.

By becoming the first country in the West to adopt Pfizer Inc.

and BioNTech SE‘s

vaccine against Covid-19, the UK made clear evidence of the kind of regulatory skill that Mr Johnson and Mr Cummings have in mind.

Brexit aside, Mr Johnson’s signature election pledge was to revive backward-looking former industrial regions of the UK with generous taxpayer-funded investments in schools, hospitals and infrastructure. Rishi Sunak, Mr. Johnson’s Treasury chief, has advocated ‘freeports’, low-tax production areas that skeptics say encourage tax avoidance, as places for multinational companies to set up factories and create new jobs.

Internationally, the vision for Great Britain after Brexit is better defined. Mr Johnson has spoken of Britain becoming a global defender of free trade, human rights and the fight against climate change, and underlined London’s ambition to act as a global fixer, standing above its weight in forums such as the Group of Seven and the United Nations. It has already ramped up military spending and, officials say, for example, it will use its financial power to develop sanctions to punish human rights violations.

A central goal of Brexit was to give the UK the ability to negotiate trade deals independently of the EU. Officials argue that the UK can make agreements outside of the EU with countries that are better suited to Britain’s service-oriented economy.

So far, new UK agreements with countries such as Japan and Mexico have largely taken over those already signed with the EU. An important target is the US.

Mr Johnson’s office was relieved when the Prime Minister was one of the first European leaders to receive a call from President-elect Joe Biden after years of courting Donald Trump. But the president-elect has indicated that he is in no hurry to offer anyone a trade deal, given urgent domestic priorities.

Write to Jason Douglas at [email protected] and Max Colchester at [email protected]