End of Austerity? Boris busy abroad?
Theresa May’s statement to the nation and immediate Cabinet reshuffle definitely has a sense of ‘out with the old and in with the new’. This was epitomised by the sacking of former Chancellor George Osborne. This is not just about personal grudges but more about ushering in a new economic plan. Both Theresa May and her new Chancellor, Phillip Hammond, have been giving very strong hints that austerity may be eased with the Government willing to borrow to invest in infrastructure projects. If these suggestions translate into actual policy this will be welcomed by numerous economists, business and developers alike, and leave Ed Balls feeling quite vindicated. During Osborne’s Chancellorship, many economists pushed for further borrowing to invest in infrastructure, R&D, innovation, education and housing, with interest rates and gilt yields so low. For now we will have to watch this space but Government investment could be a useful way to get the ‘march of the makers’ and ‘Northern Powerhouse’ up and running.
The other Cabinet move grabbing the headlines is the appointment of Boris Johnson as Foreign Secretary. Brexiteers will welcome this and other moves to place leading Leave campaigners in the Cabinet. Conversely, for ‘Remainers’ Boris Johnson was the pied piper marching us out of the EU and his penchant for skirting political correctness may also make people nervous about his diplomatic role. However, looking a little deeper at the politics of this promotion it may not be what it seems. Brexit will undoubtedly be led from No.10, Cabinet Office and the new Brexit Minister David Davis. The new Foreign Secretary is much more likely to be on the periphery of negotiations, focused on the world outside the EU. Boris Johnson will be selling the UK to businesses around the world, giving speeches which he’s very good at. So Boris will be busy, out of the country, and working immensely hard to save his credibility and career and if he does fail it won’t cost Theresa May a General Election.