Boris Johnson – Economy

Boris Johnson (Bojo) United Kingdom
Boris Johnson

Following a few years of hard hits to the British economy following Brexit and Covid, Johnson has found himself having to make U-turns on his manifesto pledges to make tactful long-term economic policy decisions. They come at the cost of public concern, but with three more comfortable years as PM, Johnson is looking to retain power in the next election, or alternatively leave a martyr legacy, in which he would have left office having made history in leading the UK through a tumultuous economical period.

Brexit

Johnson’s economic bargaining for an EU withdrawal agreement was likely to be one of the most controversial economic moves of the decade. Even with Johnson’s seemingly diplomatic agreement with the EU, Brexit is predicted to bring about 15 years of economic uncertainty, with an expected GDP loss of 4 percentage points. It is the long-term economic effects of Brexit that Johnson may struggle with convincing the global sphere that the UK ‘has taken back control’.

However, by 2021, the EU trade to the UK plunged by 40%. This is the largest drop in UK-EU trade in 20 years. Throughout the UK, manufacturers are on the brink of collapse without easy access to EU consumers. The most affected industries include the agriculture and fishing industry, which have experienced a 60% reduction in food and livestock exports. Combined with the effects of COVID-19, many UK manufacturers have found it difficult to cope with the third lockdown, which brings to light just how dependent on European trade the UK is. The EU is and remains the UK’s main source of exports and for years, the trade sector will continue to feel the impacts of Brexit. Now, Johnson grapples with taking deals with the EU, some of which are not exactly what Johnson was looking for in areas of financial services. 

Johnson has favoured a free-trade agreement with the US in order to combat unexpected drops in trade benefits following the withdrawal from the UK. Regarding the bilateral agreement as a key Brexit win, Johnson seeks allyship with Biden to boost his global stature and spread his popularity across the Atlantic. As of September, the PM is confident about the UK-US trade deal after months of delay due to American apathy to the deal, announcing the commencement of lamb trade-deal with the US. Johnson is desperate to make his post-Brexit dreams of the UK a reality. Driven by ideology, patience and diplomacy is likely to be Johnson’s tactics in getting the UK’s trade industry back on track.

COVID-19

COVID has presented an array of economic challenges to Johnson’s leadership, with a 2.9% economic contraction for the UK in the first month of 2021 This is the fastest decline in the past 40 years, Johnson is forced to step forward and prove his capabilities as leader of the Kingdom.

His economic recovery plan has entailed a £5bn plan to build infrastructure and homes. Johnson branded this his own “new deal”, comparing it to that of Roosevelt’s groundbreaking economic recovery from the Great Depression. His speech that revealed such plans mirrored the optimism of his election campaign. Johnson distanced himself from the Conservative government at the time of the 2008 financial crash, insisting that spending cuts will not be implemented in order to alleviate the problems facing the economy. Spending cuts have been the pinnacle of Conservative economic policy, which have produced continuous devastation to the country’s most vulnerable. Johnson’s refreshing COVID economic recovery plan gave a glimmer of hope to a country in ruins from the effects of COVID-19. The economic recovery plan was a combination of two factors: a desire to build the nation in a way that would compete with Johnson’s European counterparts and a sense of likeability that Johnson is still grappling to maintain.

Inequality

Representing the epitome of British political establishment, the Tory party has historically disenfranchised the working class. Margaret Thatcher infamously widened the class gap under a neo-liberal model to the point to which the country has never truly returned. Ideologically, Boris Johnson doesn’t stray too far from some of the most notorious Tory politicians. In 2013, Johnson dubbed inequality a necessity to envious economic activity, whilst advocating for the increase in selective schools.

Due to Brexit promises and his exhibition of a new-found sense of relatability, Johnson cultivated a working-class following. Now that the pandemic is seemingly over, Johnson is forced by public opinion to confront a fresh crisis, with 4.7 million people on waiting lists for varied health care services, the NHS requires significant spending and reform to survive. Johnson knows he must prioritise NHS spending to occupy political territory that could be stolen by the champions of the service, the Labour Party. However, with the stretched spending of 400bn pounds and the economy in tatters already, Johnson is finding ways in which he can gather an extra 4.5bn pounds to cover a covid backlog and improve the efficiency of the health service. In August, Johnson won a vote in the house of commons of 319 to 248 for a historic 1.25 National Insurance Tax increase, in other words, the income tax applied to workers and employees across the UK to help fund long-term health and social care improvements. Unlike other levies, the national insurance tax does not include a taxation for wealthy pensioners. Johnson has therefore been met with criticism for this move from both his opposition and his life-long supporters.

On one hand, his critics, young people and those more left-leaning have noted that this introduction will hit the young and working-class the hardest. With Welfare Cuts also increasing post-Covid, it is estimated that 2 million families who face these cuts will have to pay £100 more on NIC annually, which could further isolate the poor and vulnerable. The UK often celebrates 6 million small businesses, the rise in NIC may discourage employers from expanding and opening new job opportunities and encourage them to cut staff, leaving the job market severely unpredictable. On the other hand, Johnson has faced backlash from his supporters for going against his manifesto pledge of vowing to not raise taxes. With public disdain beginning to sweep across both blue and red constituencies across the UK, Johnson is in a very difficult position. He is now seen to be grappling to hold onto an image of integrity and trust to maintain the rhetoric of his Leave campaign: that he is a champion of the national health service and of the working class, even if it means going against manifesto pledges and annoying some of the nation’s wealthiest. Since there is no significant third party with a centre-right edge for his traditional Tory constituencies to turn to and are seemingly safe seats, Johnson will know he needs to occupy the vacuum of the middle political spectrum to remain popular in the polls. With his opposition leader, Keir Starmer moving into the middle, exemplifying more of a Tory painted red leadership style, Johnson may be in serious trouble electorally if he cannot compete with Labour in the centre.