Headroom

13 December 2019

Last night, Boris brought it in at the top end of poll expectations. Now he has headroom, as well as heft in Europe where the result will be taken, with regret, as definitively confirming the 2016 referendum. We will now see a halt in the traffic between UK Remainers and Berlaymont officials, a traffic which for forty-two months kept up pipe-dreams of reversal on both sides of the Channel. Boris is making much of his one-nation intentions, presenting his victory as the opportunity for closure. This is unlikely, however, to amount to Brino as he has always emphasised the opportunities opened up by ending EU regulation. On the other hand, deregulation is not evidently a friend to his new supporters in the provinces. I turn to this below.

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Next week, the Queen’s speech will set the scene for prompt negotiations. Now that the parliamentary shackles are off (and over the temporary period during which the press is cowed), look for stagey walk-outs from the conference room and a more nationalistic tone from commentators. We will have to see how Boris himself performs now that Isaac Levido is no longer sitting on his head. Initial impressions are encouraging: today the FTSE100 is up by 1.1%, after overnight sterling spiked by 3% on the exit poll. Oxford Street is palpably busier, promising a better shot at a bumper Xmas on the high streets, with the housing market set to get over its recent constipation

Sceptics of the Brexit project are right to point out that there is much to resolve, but wrong to insist that it is impossible to conclude future relations with the EU by the end of 2020. There is a deal waiting to be done: to simplify, access for UK services to EU markets in return for access for EU goods to UK markets. Barnier may be a tough cookie but the unequivocal Tory victory will encourage his masters to plot a more accommodating course on the main sticking point. This is regulatory alignment, the famous "level playing-field", intended to prevent what Brussels sees as unfair competition, or what you or I would call competition. Deals with third-party jurisdictions may also come in short order, taking the form of access for UK services in return for access to our own markets for agriculture, with some wrinkles about IPRs. Expect a flurry of articles in food magazines about the glories of Argentine meat, New World wine and domestic cheese.

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It may be off topic but it is nonetheless impossible to overlook the other challenges which the new team will face. It must combine a climate of deregulation with the interests of its fresh-minted provincial supporters. Expect a combination of tax and regulatory relief for business in general and provincial enterprise in particular - Freeports are set to be a big part of the story. Expect also some provincial Grands Projets: east-west rail-links - maybe even road-links, but not so much HS2 or Heathrow’s third runway. Sajid Javid will have to reconcile responsible budgeting with Boris’ pet schemes, not to say the insatiable maw of the NHS and the untamed dragon of social care.

While we are off topic, let us note the prospect of limited constitutional reform, by way of enacting the long-overdue changes to constituency boundaries and repealing the Fixed Term Parliament Act. The new Government may also revisit the role of the Courts or the House of Lords, but regional devolution or Citizens’ Assemblies are off the agenda, unless the latter comes up as a mechanic to seek consensus on that insatiable maw and untamed dragon. The danger is that this overlooks the country’s other longstanding problems. These particularly include housing and land-use regulation, especially in the southeast; and stalled social mobility, embracing unsatisfactory tertiary training and low productivity. Meanwhile, Scotland fumes and Northern Ireland festers.

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The election reminds us of the character of the country we live in. The UK remains an outlier on the left among prosperous Anglophone countries - we are still heirs to the legacy of Attlee and Bevan. Our compatriots continue to warm to socialising risk, eg, in healthcare, understandable given the volatility of supply and demand, though the lack of price feedback guarantees under-provision; railways, where a case might be made on the basis of land-use policy; utilities and mail, where it’s outright dopey; and personal security, where it makes for a quiet life, but irks “stand your ground” old-schoolers like me as weakening personal responsibility. 

On the other hand, the nation is also Thatcher’s heir: Britons prize individuality in a spirit of “Don’t step on me”, rather than “My way or the highway”. This places aspiration, property and territory, together with private and public forbearance, at the heart of a national sensibility which inescapably limits what the left can realistically seek. Last night, the voters forcibly brought this to bear upon their masters, giving us a government with headroom for the first time this decade. For which, what better to say than "Thank you"?