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Politics: another gracious speech

2019-12-20 06:38:56

More than four years ago, Open Europe made headlines with a piece of work which claimed that the cost of the 100 most burdensome EU-derived regulations to the UK economy stood at 33.3 billion a year at 2014 prices.

The whole concept of costing regulation is extremely dubious and certainly that applied by Open Europe, which tried to use the figures to knock down the Norway Option. At the time, I criticised the work and, latterly, made a more detailed evaluation in Brexit Monograph 6.

What is extremely pertinent to note in the OE work, though, is that 8.1 billion of their recurring costs were attributable to EU climate change measures, with the inference that leaving the EU would enable us to reduce (or even eliminate) these costs.

However, if we fast forward to yesterday's Queen's speech, we find that a government supposedly obsessed with deregulation is committing to continue "to take steps to meet the world-leading target of net zero greenhouse gas emissions by 2050". It will, we are told, "continue to lead the way in tackling global climate change, hosting the COP26 Summit in 2020".

In actuality, this not only means that the EU regulation must be kept in place but also vastly extended, at a cost estimated by former chancellor Philip Hammond at over 1 trillion. Even if there were any financial gains to be made from reducing or eliminating EU regulation, therefore, Johnson has just committed to a level of expenditure which will average over 30 billion a year for the next 30 years by far the biggest spending commitment in the entire Queen's speech.

If Johnson is serious about this, and not just indulging in gesture politics, then this makes a nonsense of the "golden age" that he is offering for "Britain" (but not the UK?) when we leave the EU.

In fact, the costs are likely to be significantly higher than Hammond's estimate, as it has been estimated that it will cost 1.3 trillion just to decarbonise the electricity supply. To that must be added the cost of converting the entire UK transport fleet, on top of closing down the national gas distribution network and converting all households to electric heating and cooking.

Yet this is barely mentioned by the legacy media which is quick to highlight the legal guarantee of 33.9 billion extra in annual NHS funding by 2023/24. Even a sulky Corbyn complains that the speech contains "nothing of substance" on tackling climate change.

When we have a situation where Johnson can tuck in a trillion-plus spending ticket into the Queen's speech, and no-one notices, this simply underlines the fantasy island aspect of his "blueprint for the future of Britain", as he calls it.

Obviously, his priority is to deliver the United Kingdom's departure from the European Union on 31 January, and he intends to bring forward legislation to ensure the UK's exit on that date and "to make the most of the opportunities that this brings for all the people of the United Kingdom".

Then, he will have Ministers seeking "a future relationship with the European Union based on a free trade agreement that benefits the whole of the United Kingdom". They will also begin trade negotiations with other leading global economies.

Missing from that commitment in the Tory manifesto and similarly missing from the speech is that single, all-important word: "comprehensive". While the wonks and the rest of "johnny come lately" commentariat are gravely intoning that a deal cannot be concluded in the eleven months that Johnson is allowing for negotiations, it is perfectly feasible to agree a "bare bones" or de minimis treaty with the EU and get it signed in time for it to take effect when the transition period finishes, at the end of December 2020.

But, if that is Johnson's intention, then there will be a financial penalty to pay. The most immediate effect will be a significant loss of exports to the EU, covering both goods and services. Estimates of a five percent "hit" to GDP could well be on the generous side but even a loss of two percent could drive us into a technical recession.

It appears, though, that Johnson is also taking measures to eliminate Brexit from the national vocabulary once we have left the EU, scrapping the Brexit department and rolling up the trade negotiations into other departments, thereby giving "closure". As the man said, "Brexit doth never prosper, what's the reason? For if it prosper, none dare call it Brexit".

But, if the non-Brexit talks deliver the expected recession, then Johnson's ideas of "an ambitious programme of domestic reform that delivers on the people's priorities" will come to nought. As economic activity falls, tax revenues will shrink, unemployment will rise and the spectre of inflation will once more stalk the land. The new Johnson government will struggle to meet existing commitments, much less finance new ones.

Nevertheless, that has not slowed down the torrent of fiction. Steps will be taken "to grow and support the National Health Service's workforce". Hospital car parking charges will be removed for those in greatest need although how that is to be administered is not stated.

Ministers "will seek cross-party consensus on proposals for long term reform of social care", and they will ensure that "the social care system provides everyone with the dignity and security they deserve and that no one who needs care has to sell their home to pay for it". The price tag for this will amount to billions.

And then there is the further fantasy of the "modern, fair, points-based immigration system" which will "welcome skilled workers from across the world to contribute to the United Kingdom's economy, communities and public services". There is no mention of annual quotas, the absence of which renders any idea of immigration control meaningless.

But, if you are going to shake the money tree, I suppose you might as well promise the earth. The Queen was asked to tell us that her government would "bring forward measures to support working families, raising the National Insurance threshold and increasing the National Living Wage. To ensure every child has access to a high-quality education my Ministers will increase levels of funding per pupil in every school".

Measures are also to be brought forward to encourage flexible working, to introduce the entitlement to leave for unpaid carers and to help people save for later life. New measures will be brought forward to protect tenants and to improve building safety. Steps will be taken to support home ownership, including by making homes available at a discount for local first-time buyers. Ministers will develop legislation to improve internet safety for all.

And so on, and on it goes, including the establishment of a "Constitution, Democracy and Rights Commission", while work will be taken forward to repeal the Fixed-term Parliaments Act. There will be no more begging for an election.

Anything and everything is possible in Johnson's "golden age", with his "people's parliament" paving the way for the sunlit uplands. It sounds so good, one might almost wish it was true. But then, one must recall, it comes from a government led by a serial liar.