October 11, 2021

Europe

UK: After conference season, the policy work begins

BY Carsten Nickel

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( 3 mins)

It is important not to read too much into the annual gatherings of the party faithful. However, the Conservative conference reflected that PM Boris Johnson is very much in control of his party. No serious cabinet or backbench rebellions followed even from controversial moves such as raising national insurance contributions to fund the NHS and social care reform. Johnson’s cabinet reshuffle was well organized, and future potential challengers have either been integrated (such as new Foreign Secretary Liz Truss) or facing serious challenges over public spending and taxation, which may take the shine off some of their popularity (such as Chancellor Rishi Sunak).

Johnson took a calculated risk in declaring that the shortages of truck drivers (leading to major queues for petrol and diesel) and many other workers across a range of sectors are bumps in the road on the way to creating a high wage, high skills, and more productive economy of the future after freedom of movement ended because of Brexit. On the one hand, Conservative voters – and Leave voters generally – may be sympathetic to the idea of British businesses being forced to pay higher wages to attract British workers into these jobs. Johnson contrasts this with his view of Labour’s position, which would allow for more immigration.

However, Johnson’s approach may not end up working politically with millions of people on low incomes who over the winter face petrol shortages at the pumps, higher energy bills, higher inflation, a cut to universal credit, and higher taxes from Johnson’s increase to national insurance contributions. Workers in specific sectors will welcome higher wages, but they will take time to materialize while many more voters could feel the cost of living crisis over the winter.

How the government intends to navigate these challenges remains unclear after the conference. The gathering was a policy-free zone, as the party was mostly just enjoying the ability to meet in person again after Covid, celebrating their electoral successes in 2019 and 2020. Therefore, among the key signposts to watch will be several major announcements looming over the coming weeks. This includes the heat and buildings strategy for net zero (following opposition against a previously intended gas boiler ban), an HM Treasury plan on meeting the costs of net zero and the overall government strategy for hitting that goal (in the run-up to COP26 beginning at the end of this month), the spending review and budget on 27 October, and the’leveling up’ white paper intended to deliver on this key promise from the previous election campaigns.

Following conference season, one poll showed that Labour leader Sir Keir Starmer was now seen as level pegging with Johnson for who would be best PM, but the Tories remain ahead despite Covid and petrol shortages. Moreover, new polls in marginal seats suggest Labour might regain some of its traditional seats at a future general election, but Johnson was likely to be returned with a reduced majority. Against this backdrop, the policy announcements ahead this autumn – and the political reaction to them – could give a better idea of how Johnson intends to balance between two competing Tory objectives: the need to spend on the green transition, “left behind” areas, and the consequences of Brexit; and getting the deficit under control.

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