The new PM is betting that he can pump up enough confidence—and money—to see him through a difficult autumnby George Magnus / August 5, 2019 / Leave a comment
The political tittle-tattle is that Downing Street is in the early stages of a strategy known as “boosterism.” After the despondency and caution of Theresa May’s government, Boris Johnson wants a government of a sunnier disposition. The strategy is part-rhetorical and part-economic but essentially it is about promoting confidence in Britain.
The carefully-crafted policy announcements over the last week or so are just the beginning. We can expect much more leading up to a busy October, a month which will feature an early Budget, the Brexit deadline, and, denials notwithstanding, a possible general election announcement. The strategy is designed to mitigate the adverse consequences of Brexit and ensure victory in any election. What exactly is it, and will it work?
If you think boosterism is a No 10 strategist’s best laid plan for an “ism” alternative to socialism, you are mistaken. It was originally a strategy used by pioneers as they migrated westwards across the United States, promoting policies and programmes to attract capital and labour to local towns and cities. Sometimes it worked, often it was simply a false prospectus that ended up in disappointment and failure.
In the context of Brexit, then, boosterism seems a wholly appropriate term. It is about the promotion of Brexit Britain as the Johnson government seeks to change the narrative. That involves authorising a significant dose of Keynesian tax and spending policies taken straight out of the Labour playbook. For the Conservatives, austerity and cutbacks are gone, and the fiscal wallet is now wide open.
To date, leaving aside the government’s allocation of over £6bn to prepare the country for a no-deal Brexit, the proposals include the recruitment of 20,000 more police officers, a cross-Pennine rail link between Manchester and Leeds, the reversal of cuts to government infrastructure programmes with up to £100bn of additional funding, a £50bn housing scheme and a review of stamp duty. Add to that more money for the NHS, social care, schools, universal rapid broadband, cuts in the upper rate of income tax and in company taxation, and a higher threshold for national insurance.
The government is abandoning its predecessor’s fiscal rules. These were to keep public borrowing to less than 2 per cent of national income by 2020/21, balance the budget in the mid-2020s, and secure a steady fall in net debt as a share of GDP.
Since the start of May, moreover, UK…