Boris Johnson, prime minister of Britain, delivered a hope-filled Christmas message, bidding “goodbye to the division, the rancor and uncertainty” that had held the country back, while welcoming 2020 as a “wonderful opportunity to unite as a country and move forward together.”
This characteristic Johnsonian optimism is in stark contrast to Jeremy Corbyn’s miserable moaning about a Dickensian England — supposedly brought to its knees by austerity and jeopardized by Brexit — during the election campaign. Corbyn’s pessimistic visions were both alien and insulting to many Brits and may help to account for Johnson’s landslide victory.
However, some conservatives are deeply uneasy about Johnson’s move to make 2020 a year of big spending. Should they be?
When it comes to budgeting, voters expect and will accept bad news as well as the good, up to a point. In 2009, after the financial crash, David Cameron, then prime minister, said that “the age of irresponsibility is giving way to the age of austerity.” Then, in 2010, the newly elected Conservative and Liberal Democrat coalition made reducing the deficit (which was around 10 percent of GDP) and national debt their focus. They pursued this via public-spending reductions and tax increases amounting to $145 billion, though they made notable exemptions in the National Health Service and education.
Brits took the hit in their stride, as evidenced by the fact that the Tories won the 2015 general election with austerity written in large print in the manifesto. But this willingness didn’t last long. The social costs of austerity were increasingly publicized and began to dominate the agenda of the opposition: the Labour party. Crises in law enforcement, social care, and burdens on the National Health Service (NHS) were reported widely by the liberal press. The NHS saw the resignation rate for medical staff grow by over 50 percent from 2011–12 to 2017–18.
Unlike 2015, in the 2017 general election, Theresa May’s proposed cuts to welfare, especially in the form of social services, were a political disaster. Nicknamed “the dementia tax,” under the new plans, any person who received state-sponsored assisted living in their home would have to pay for it through the value of their home after they had died. Commentators suggested this was one of the biggest factors influencing the drop in Tory support and their unexpected losses in 2017.
So, while Brexit might have helped shatter the traditional left/right divide, if the Tories were going to break through Labour’s “red wall” in 2019, they needed to make some big promises.
Fortunately for Johnson, he inherited circumstances that made this easier. In 2018, the Office for Budget Responsibility had drafted a forecast, ending in 2023, outlining that public finances would have an extra $26 billion to play with. In October 2018, then-chancellor Philip Hammond had promised that “the era of austerity. . . is finally coming to an end.” The lineup for Johnson was perfect. The end of an era. A new decade marked by prosperity and opportunity.
Commenting on the recent election, my colleague Kyle Smith complained that “Thatcherism is dead” and that under Prime Minister Johnson, “the parameters of British economics just took a large step to the left.” This may be so. But the circumstances Thatcher faced were quite different to the ones Johnson faces. To borrow from Dickens, in this election — Thatcher was dead to begin with.
The dragon Thatcher was trying to slay in 1979 was inflation. Her Medium-Term Financial Strategy of 1979 aimed to tackle this by reducing money-supply growth. She boldly preferred Hayek and Friedman to Keynes. But while any conservative leader worthy of the name understands that public spending does not translate directly into economic betterment (there are vast forces out of government control, “the invisible hand,” etc.), bold gestures and brave visions that meaningfully respond to the needs and circumstances of the time make sound economics politically sustainable.
Does this mean Johnson’s economic plan will be proven right? Not necessarily. It’s too soon to say. Plus, the challenges Britain will face in the next decade are only just beginning to be understood. For one thing, as noted in the Economist, “from the mid-2020s the ratio of pensioners to workers will start to move rapidly in the wrong direction, weighing heavily on the state.”
Perhaps a better parallel than the Thatcher era, then, is the 1920s. Unemployment rose sharply after the post-war boom of 1919–20. In what was as much a political move as an economic one, Winston Churchill, then chancellor, attempted to maintain public morale and trust by keeping the gold standard. Though this was and still is highly criticized, he explained his logic at the time. On April 28, 1925, he addressed the House of Commons:
We have entered a period on both sides of the Atlantic when political and economic stability seems to be more assured than it has been for some years. If this opportunity were missed, it might not soon recur, and the whole finance of the country would be overclouded for a considerable interval by an important factor of uncertainty. Now is the appointed time . . .
These matters are very technical, and, of course, I have to be very guarded in every word that I use in regard to them. I have only one observation to make on the merits. In our policy of returning to the gold standard we do not move alone.
In handing Johnson a landslide Tory majority, Brits have rejected socialism, the danger of which is that it offers desperate people dangerous ideas, provides superstitions instead of solutions, and elevates resentment over reason. There are dangers yet to come. But that the Tories have successfully sold a vision of reasonable hope: of a moderate and persuasive conservatism, fit for a new era. And that is no bad thing.