Richard North, 01/08/2019  

Despite being accused of "bluff and bluster" on the Irish border question, it appears that Johnson does have a plan of sorts when it comes to managing the inevitable no-deal departure that he's in the throes of setting up.

One element of that comes to us via Sky News which reports that the government is planning what amounts to a post-Brexit permit system for goods vehicles heading for Dover, in a bid to avoid traffic congestion.

With a recent report of a deal made between the Port of Calais and Channel shipping lines, where British trucks would be prevented from boarding ferries at Dover if they didn't have the correct paperwork, this is the other half of the equation which prevents rejected traffic clogging the port.

Basically, Highways England Traffic Officers (TOs) will be given the power to demand and check drivers' documentation for the first time. They will use this power to intercept Dover-bound lorries, instructing them to take alternative routes or to divert to holding areas – thus preventing the traffic reaching the port in the first place.

This is very much what I predicted might happen, and is based on the techniques used by the police during the Thatcher-era miners' strike, when secondary pickets were intercepted (illegally) miles from their intended destinations and turned back or delayed.

The use of such a technique definitely seems to accord with the bigger picture, which seems to be a structured attempt to manage the immediate effects of a no-deal Brexit. So, in addition to "disappearing" the traffic queues, the game plan appears to be to throw money at the problem, the total allocated now reaching £6.3 billion.

Part of that money is to be used to buy up unsold lamb, held back from continental markets either through lack of demand (owing to tariffs) or because they are no longer permitted entry. That there may not be sufficient chilled storage capacity to absorb the surplus has not been addressed, so we cannot rule out the prospect of government-funded funeral pyres, redolent of the foot and mouth outbreak.

Cash is also to be spent on hiring 500 extra Border Force officials and improving the transport infrastructure around the Kent coast. The government also intends to spend £434 million to ensure the supply of vital medicines, booking extra ferry capacity, space in Eurostar trains and even dedicated flights. And more than £100 million will be spent on propaganda, telling people how to prepare for the worst-case Brexit scenario.

Behind all this, though, it seems there is something deeper than splashing other peoples' money about. As near as is possible for the Johnson administration to have a philosophy, this is it – what we must learn to call boosterism.

Predictably, the Guardian is rather sniffy about what it calls the new government's mantra: an economic credo, to be laid down in the autumn budget, of spending heavily on infrastructure while also cutting taxes.

As such, says the paper, it combines fiscal stimulus – putting "rocket boosters" under the economy, as No 10 insiders have reportedly briefed – with a more nebulous attempt to gee up confidence in growth, similar to Johnson's simultaneous attempt to increase optimism about Brexit.

But, if the left-wing media isn't that impressed, nor is the Financial Times, although it does allow one ally of Mr Johnson to assert that "Boosterism is a cool word", stating that he thinks "it will stick". The man occupying the post of prime minister wants to put "rocket boosters" under the economy by finally ending a decade of austerity and preparing for Brexit.

In the real world, this paper tells us that the new economic plan is only now taking shape, but Johnson is clear it involves spending the £26.6 billion "fiscal headroom" built up by former chancellor Philip Hammond to cushion the impact of a no-deal exit.

However, we are wisely informed that this headroom "is simply another way of saying higher borrowing", the Office for Budget Responsibility's estimate of the extra amount the government could borrow while meeting its fiscal mandate to keep the deficit within 2 percent of GDP.

The FT says that the OBR has underlined that any new spending or tax cuts would still leave borrowing and debt higher than in its last forecasts, and that "there is no war chest or pot of money set aside that would make them a free lunch". Headroom against the 2020/21 borrowing target "does not provide an anchor for medium-term tax and spending decisions".

Worse still, the OBR's forecasts are premised on a smooth Brexit: it estimates that the economic shock that would follow a no-deal outcome - even with only short-term disruption - would add about £30 billion a year to borrowing from 2020-21 onwards.

And then we have Nick Macpherson, permanent secretary of the Treasury from 2005-2016, who says he feared that if Johnson makes big unfunded spending promises, his administration risks adding an "incoherent macroeconomic strategy" to a chaotic Brexit strategy.

"The risk is the depreciation of the pound turns into a rout", he says, arguing that Britain - unlike the US - was a very open economy which did not have a reserve currency. "People don't have to hold sterling", he says.

And if the macro-economic position looks rather uncertain, it is not even certain that Johnson's attempts to spend his way out of trouble has the slightest chance of working. Down in the weeds, HMRC's plans to deliver a new Customs Declaration System (CDS) are coming adrift, which will make it rather difficult to speed traffic flows through Dover.

And even the loyalist Telegraph is allowing its columnist Jeremy Warner to ask: "Does anyone actually believe Boris Johnson's high stakes, no-deal bluster?"

In a sort of piece that might have been written on this blog, he looks at the fate of medical device production and the difficulty manufacturers are facing in trying to get alternative certification in time for a no-deal Brexit. As things stand, Warner writes, Britain is the biggest centre in Europe for the certification of medical devices. A year ago, about 44 percent of all so-called Conformité Européenne medical device certificates were through UK notified bodies (NBs).

As Britain's Medicines & Healthcare Products Regulatory Agency bluntly puts it in its updated no-deal guidance notes: "If there's no deal, UK-based NBs will no longer be recognised by the EU after 31 October 2019, meaning the devices they have certified will no longer be in conformity with the applicable EU Directive. As such these products will not be able to be placed on the EU market".

Although manufacturers are seeking alternative arrangements, these are not without their own problems. Yet they cannot be wished away, and neither are they going to disappear just because Johnson's administration throws money at Brexit.

What is remarkable – or perhaps not – is the volume of comments, most of which (from the sample I looked at) were hostile to the author, accusing Warner of "project fear". There is an absolute determination amongst some to block out any information about the downside of a no-deal, savagely attacking those who dare to mention it.

Rather, they prefer to be in the grip of Johnson's miracle "boosterism", talking up the brave new world of a no-deal Brexit where the sun always shines and hyperbole is the answer to every problem. Everything will come right if we maintain a positive attitude – you know it makes sense.

comments powered by Disqus

Log in

Sign THA

The Many, Not the Few