The three planks of Boris-onomics

Boris Johnson, our new PM, will have to act fast to put Britain back on its feet, say Matthew Lynn.

Boris Johnson looks through binoculars © Dominic Lipinski/AFP/Getty Images

Johnson: put Brexit behindyou and look to the future

Boris Johnson is our new prime minister. But his cautious campaign, long on optimism but light on actual policies, doesn't give us much of a clue as to what Boris-onomics will actually look like. Yet the tasks facing him are clear. The arguments over our departure from the EU will have to be resolved before they consume him. The economy will have to be rescued from a potential recession. And he will have to come with a programme that will have popular appeal and restore the country's standing in the world. Here are the three places he should start.

1. Prepare for no-deal

2. Prepare an emergency budget

Fortunately, the public finances are back in respectable shape and the government can move quickly to pump up demand with a round of spending. The priorities? Johnson took a lot of flak for suggesting it, but the 40% tax rate genuinely does kick in at far too low a rate. It has been a long time since the basic rate was cut, but that would help tackle low pay as effectively as increasing the living wage. Specific sectors, such as cars and agriculture, are going to need help to get through leaving the EU this might be the one occasion when subsidies, so long as they are time limited, can actually be justified. All that will need to be done by the end of August.

3. Reform and simplify taxes

Business rates are killing off the high street and need to be reformed: retailing might die out, but there is no need for the government to kill it. Our corporate taxes are already low, but cutting the rate to 10% would make it the lowest in the developed world and would make the UK an attractive place to invest despite leaving the EU's single market. We should be embracing new technologies, from drones, to artificial intelligence, to lab-grown meat, so that the UK attracts investment from around the world as well as building its own technology companies. That won't happen overnight. But Johnson's instincts are to encourage innovation and entrepreneurship, and he should unleash that on day one.

After three years of obsessing about leaving the EU, the country badly needs to move on. There are bigger and more important issues to worry about than membership of a not terribly successful trade bloc. It remains to be seen whether Johnson can achieve that. But if he is to have any chance, then he needs to hit the ground running he will only have a few months to make a success of his premiership.

Recommended

I wish I knew what contagion was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what contagion was, but I’m too embarrassed to ask

Most of us probably know what “contagion” is in a biological sense. But it also crops up in financial markets. Here's what it means.
21 Sep 2021
Why is the UK short of CO2 and what does it mean for you?
UK Economy

Why is the UK short of CO2 and what does it mean for you?

The UK is experiencing a carbon dioxide shortage that could lead to empty shelves in supermarkets. Saloni Sardana explains what’s going on and how it …
21 Sep 2021
How high energy prices are driving up food prices too
Soft commodities

How high energy prices are driving up food prices too

High energy prices aren’t just affecting our heating bills, they’re making food more expensive, too. Saloni Sardana explains what’s going on.
21 Sep 2021
Warsaw and Stockholm: the unexpected new threats to the City of London
UK stockmarkets

Warsaw and Stockholm: the unexpected new threats to the City of London

London has seen off challenges from Frankfurt and Paris, but two other booming financial centres are a bigger threat, says Matthew Lynn.
19 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
How to stop recurring subscriptions becoming a drain on your money
Personal finance

How to stop recurring subscriptions becoming a drain on your money

Tracking and pruning subscriptions isn’t as easy as it sounds. Here's how to take charge.
14 Sep 2021