Thu, Jul 02, 2020 page9

• Boris Johnson plunges Tories into an identity crisis

  Spending big to help the economy recover from the COVID-19 pandemic, the Conservative British prime minister is defying his party’s traditional fiscal beliefs

  • By Tim Ross, Kitty Donaldson, and Alex Morales / Bloomberg
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  British Prime Minister Boris Johnson set out his hopes for easing Britain’s lockdown last week and also his aching for a return to a more familiar life.

  “I want to make one thing clear, I would love to play village cricket again,” Johnson said.

  When it comes to the most quintessential of English games, the prime minister regards himself as a “D-league” sportsman who is outshone by both his brothers. However, he knows that there is no clearer sign that all is not well than the absence of men and women in white on village greens.

  

  Illustration: Mountain People

  For many in Johnson’s Conservative Party, cricket is more than just a game. It represents tradition and national identity in an era of unprecedented upheaval. As the UK faces the pressures of the COVID-19 pandemic, Brexit’s trade disruption and strains on race relations, the desire for the genteel summer sport of the Tory heartlands speaks to a deeper yearning for simpler times.

  COVID-19 is not just a health emergency and an economic disaster for the Conservatives. It has turned into a crisis of political self-confidence that has sparked an intense internal debate over the direction of Britain’s oldest and most successful party.

  For decades, the Tories have stood for libertarianism, fiscal prudence and the free market. The party is now spending billions to rescue the economy.

  One senior Tory said the party was dangerously adopting “socialism.”

  The big risk is that even this huge gamble might not work.

  In a major speech on Tuesday, Johnson set out his vision for dragging the economy out of what might be its deepest recession in 300 years and confirmed his commitment to long-term investment in some of the country’s most deprived regions, arguing that balancing the books must wait until recovery is secure.

  Reprising spending pledges he made before December last year’s general election, Johnson’s office announced the acceleration of ￡5 billion (US$6.2 billion) of investment in roads, schools and hospitals, and promised to publish a strategy for further capital spending in the fall.

  After three months of lockdown, it is a vital chance to reclaim the agenda more than six months since he delivered the biggest Tory majority since former British prime minister Margaret Thatcher in 1987.

  Some Tories are worried that the prime minister has lost his grip and fear that the response to COVID-19 has been badly bungled. Johnson himself was left fighting for his life while his reputation for managing the pandemic was battered.

  There is also concern that his government is out of touch with the public mood in its reaction to the Black Lives Matter protests that spread to the UK.

  In the words of one senior minister, Johnson’s message to the country must convey a strong sense of leadership.

  He must show that “we will come out of this better than we were, like after the war — but without changing government,” the minister said.

  Across Europe, the virus has ripped through fiscal conservatism. German Chancellor Angela Merkel’s Christian Democratic Union has effectively abandoned spending constraints.

  In the UK, it is not just the question of how to recover from a deep recession and repair national finances: Johnson has consistently ruled out a return to the spending cuts that defined the Tories after they took power in 2010, especially when they could hit the workers that kept the country going during COVID-19.

  However, at stake is the very political purpose of Johnson’s party — and his future as its leader.

  The personalities jostling for influence over Johnson in the debate are likely to shape the course of the economy for decades. Up front is Chief Adviser to the Prime Minister Dominic Cummings. He is likely to hold more sway than any elected politician on what the prime minister eventually says, putting the fate of the party’s identity in the hands of a man who is not even a member.

  How Cummings emerged as Britain’s eminence grise offers a clue to the approach he might adopt to tackle the recession.

  The mastermind of the 2016 campaign to leave the EU, Cummings helped design last year’s “Get Brexit Done” election manifesto. It triumphed by persuading thousands of traditional Labour Party voters to lend their support to the Tories.

  On Nov. 18 last year, Johnson was giving a speech to the Confederation of British Industry (CBI), the UK’s most influential business lobby. Behind the scenes, Cummings pushed hard for Johnson to deliver uncomfortable news. The government was canceling the promised cut in corporation tax and would instead focus on spending more money on the National Health Service (NHS), traditionally a Labour priority.

  At a stroke, the move blew up the conventional narrative that the Tories were in bed with big business and Cummings had what he wanted: Voters watched the evening television news and saw a Conservative leader doing something different.

  “The CBI thing showed Boris cares about the NHS and he is telling his mates in business they are going to have to pay for it,” a person familiar with the matter said.

  Cummings is also credited with devising Johnson’s blueprint for “leveling up,” focusing investment in infrastructure projects on economically deprived regions, often those districts that voted for Brexit. It was a message that carried the day in the election.

  Yet even Johnson’s election plans for ￡100 billion of investment pale by comparison to what came next.

  A week after delivering his budget in March, Chancellor of the Exchequer Rishi Sunak was forced to rewrite his plans as COVID-19 engulfed the UK and businesses closed down.

  Sunak set up a furlough program to pay the wages of millions of workers and other facilities for hundreds of billions of pounds of loans to prop up failing companies. It was a far cry from the free market economics of the Thatcher era.

  “What’s happened has been a massive shock to the economy, far worse than the 2008 crash,” a senior official in Johnson’s team said, arguing that “lame duck” companies needed as much support as possible.

  “It’s no good going for a free market attitude in this climate,” the official said.

  The budget deficit in the current fiscal year, forecast to be about ￡55 billion when Sunak took over, is now on course to top ￡270 billion, according to the latest survey of economists compiled by the Treasury. That is equal to about 14 percent of British GDP, more than at any time since World War II.

  Meanwhile, the national debt is approaching ￡2 trillion and has exceeded the size of the UK’s economy for the first time since the 1960s.

  Infighting over economic policies carries risks for the Tories. Senior Conservatives fear that if they mishandle the recession, after already presiding over the worst death toll in Europe, voters would flock back to a resurgent Labour Party under its new leader Keir Starmer.

  However, the scale of the financial outlay is alarming some traditionalists in Johnson’s party, who believe they cannot afford to mimic the approach of Labour and run up the country’s debts.

  Graham Brady, the senior Tory who chairs the 1922 Committee of Conservative legislators and oversees party leadership contests, said how to define conservatism after the pandemic was a “big question” without a clear answer yet.

  “There will necessarily be a place for a party that doesn’t want these levels of spending and borrowing to be the new normal, and that surely must be the Conservative Party, but the sums of money are so great that I worry it will take a very long time to come back to a reasonable state of affairs for the public finances,” Brady said.

  Another senior Tory puts it differently, arguing that the government’s response to the pandemic so far must stop even if that means brutal choices about where cuts to spending must fall.

  Nothing should be off the table when it comes to balancing the books, said the influential Conservative, who declined to be named. The person added that it might need to include the previously unthinkable policy of scrapping Britain’s Trident nuclear weapons program.

  David Lidington, who served as de facto deputy prime minister under Johnson’s predecessor, former British prime minister Theresa May, predicted that Trident would survive. However, Lidington said that the Ministry of Defence would face “some very hard questions” about what is required for protecting British security, and what is affordable.

  “There could be quite a fierce debate about, for example, the size of the army,” Lidington said.

  However, within Johnson’s top team, the argument — so far — is running the other way.

  Borrowing costs are at record low levels and there should be no hurry to pay back the debt, one Cabinet minister points out, arguing the government should treat the vast sums it has borrowed in the same way as the UK managed its war debt in the second half of the 20th century.

  “There are plenty of buyers for high quality sovereign debt right now,” the minister said.

  The priority is not to balance the books, but instead to “build, build, build” with infrastructure projects and to get the country out of the hole it is in, they added.

  “It is a huge task, but there has to be an upside to having had such an extensive support program. In four years’ time we need to be able to show the produce,” they said.

  In 2024, Britain is to go back to the polls to choose the next government and the Conservatives are to be judged on the state of the economy.

  Focus groups by some of Johnson’s allies have shown a willingness among the public to pay more tax if it is linked to funding for the NHS. Participants in those groups also said that because businesses have had so much support from the state, it should be corporations that pick up the bill afterward, a person involved said.

  However, what about the man in the middle? Johnson does not always find big decisions easy and dislikes telling people unpopular or unpalatable truths.

  “He’s a middle of the road prime minister — he’s not an extremist. The prime minister believes in the private sector, but he sees that it needs some help,” said one person who works with Johnson.

  Another Tory who has worked with the prime minister since the Brexit campaign says Johnson is instinctively a free-market liberal, who is being nudged to the left by Cummings. If the adviser, who has faced criticism over his own conduct during lockdown, should leave, Johnson might revert to a more classic Tory position, the person said.

  The Tories’ identity crisis is also playing out amid a wider unease in British society. Violence has broken out in the aftermath of Black Lives Matters protests, with public statues of British slave traders — and even wartime British prime minister Winston Churchill — among the monuments targeted. Johnson insisted that British imperial history cannot be edited for political convenience.

  Economically, the UK will experience an earthquake in its trade relationships at the end of the year when it leaves the EU’s single market and customs union.

  Former British secretary of state for Digital, Culture, Media and Sport Nicky Morgan, who stood down in February, said the Tories were facing a “massive” adjustment with politics in “a state of flux.”

  “Conservatism as we saw it in December [last year] has had to alter, but that is in a way the secret of the Conservative Party’s success — it has always been able to move itself on to where the country is. Occasionally we’ve not been able to do that as quickly, which is why we end up in opposition,” Morgan said.

  For optimists in Johnson’s team, the hope is that the UK can harness a competitive advantage from leaving the EU’s regulatory regime and would bounce back stronger than other G7 economies. For them, Johnson’s personality is the key. His love of big projects and campaigning charisma would count for a lot to get the country going again, they say.

  First, Johnson is desperate to give the public their freedom back. Throughout the pandemic peak, he kept alcohol stores open and was reluctant to order people to stay in their homes. He is seeking to encourage the public to go out and shop in the stores that have been shut for months.

  As for cricket, every Tory prime minister for the past 30 years has professed their love of the sport, and many of the party’s politicians are keen amateur players. None has had to impose a moratorium on playing.

  By his own admission, Johnson hits the ball out of the ground with his first big shot before his innings generally ends quickly in failure. His party hopes that he has more staying power in office.

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