Three issues Boris Johnson's new government must tackle – none of which is Brexit
Courtesy of W David McCausland, University of Aberdeen
More of these, please. Craig Russell / Shutterstock.com
Now that Boris Johnson has moved into 10 Downing Street and appointed his new cabinet, the real work begins. He’s got a lot on his plate, not least of which is Brexit. But leaving the EU should not be his sole focus if he wishes to re-engage with those disaffected voters he will need to bring on side in a future general election.
Brexit may be a mess but, when it comes to Britain’s economy, Johnson has inherited a positive record. Employment at record levels and unemployment at the lowest rate for a generation. The nation’s finances under control. Low interest rates. Real wages starting to rise. Low inflation.
Johnson has an economic foundation many governments would cherish. And all this despite the much talked-about uncertainty around leaving the EU.
Yet there is no “feel good” in Britain. There is, of course, a flip side to all these positive statistics. Rising inequality, a housing shortage, overcrowded and expensive public transport, lack of infrastructure investment, cuts to education and public services.
This is why Johnson must first tackle the concerns of the “squeezed middle”. Then, he has to reach out to hardworking low-income voters. Those forgotten by the political classes over the past two decades. Hit by increased council tax. Facing arduous and expensive journeys to work. Who have taken on ever-growing amounts of private debt to maintain their consumption. I’m going to focus on three examples.
1. Transport
I’ll begin with the bus. A difficult one for Conservatives who have historically never championed the bus industry. It has also been neglected by the left who are ideologically opposed to private bus operators. But the bus is key to solving urban congestion and air quality. And a vital lifeline in rural communities.
Urban planners must design bus routes into new developments and create effective bus priority measures in existing areas. We must also find ways of making multiple transport operators work for passengers. All areas of the country must see investment in electronic price capping systems, which limit the amount you can spend on a journey, in the same way this is done in London. There must be coordinated planning to ensure that all areas are covered and not just the most profitable. This involves putting passengers (not operators) first and potentially subsidising less profitable feeder services or evening provision.
Then there is the tram. Out of all public transport options, the electric tram is the best for getting people to choose public transport over the car. There needs to be ambitious extension of existing tram systems in cities such as Sheffield and Manchester, as well as new systems in other urban areas, and accelerated planning provision to enable rapid development.
Finally, railways. It is barely believable that it is cheaper to fly between many major UK cities than to take the train. Not to mention the capacity constraints and ageing infrastructure that cause overcrowding and delays on trains.
As with bus services, there is nothing wrong with private provision – nationalisation is not the answer. But it has to be made to work for the passenger. Again, simple ticketing with price caps to make travel affordable must be central to any solution. But more importantly, there needs to be massive investment in infrastructure, particularly in the north of England. The triangle between Leeds, Manchester and Sheffield should be the priority. Not as sexy as HS2, but capable of delivering much better value.
2. Housing
Housing is much more in the Tory comfort zone. It should not be difficult for Johnson’s party to sell a programme of private house building. This has to prioritise brownfield development and bring back into use vacant buildings (for example, above shopfronts on high streets). But it will also involve new developments on greenfield sites.
Public transport provision has to be at the heart of larger developments. Quality of build also needs improving: better environmental quality, reduced density, sustainability of community.
3. Tax
While headline tax rates have been protected over the last two decades, politicians have increased tax by the back door. The greatest stealth tax of all has to be council tax, which has little relation to ability to pay. This needs to be addressed.
Many ordinary people have found themselves paying higher tax rates as income tax thresholds have not shifted upwards in line with inflation. Here I think Boris Johnson has taken the right approach in seeking to raise the threshold for paying the higher rate of income tax from £50,000 to £80,000. This is a much greater priority than corporation tax reductions, and electorally much more savvy.
A fresh look also needs to be taken at pensions. At a time when we should be saving more, it is disappointing that those good pension schemes that do exist are constantly under attack. The incentives need to be reversed to encourage greater private provision and safeguards put in place so that risk does not fall on the individual.
All-in-all, however, the UK economy is in remarkably good shape and is well positioned to take advantage of the opportunities that a clean exit from the EU may provide. But the domestic agenda has been neglected, and attention must be devoted to addressing issues of concern to those who may have once been inclined to vote Conservative but who feel forgotten. Until these are addressed, it is probably too early for Johnson to consider calling a general election just yet.
W David McCausland, Professor of Economics, University of Aberdeen
This article is republished from The Conversation under a Creative Commons license. Read the original article.
