As Prime Minister Boris Johnson starts his first full week in the top-job, we reflect on his new cabinet and the priorities for the government.
This government is unashamedly vote leave, from No. 10 staffers to senior cabinet posts, as we reflected last week, this new government has Brexiters now firmly in control. A government built to deliver Brexit and in campaign mode – for Brexit first, and then a general election.
The Prime Minister has certainly hit the ground running. The Sunday Times poll this weekend revealed a 10-point Tory lead over Labour, largely at the cost of the Brexit Party. And a swath of domestic policy announcements, from the steps of No. 10 and in a speech in Birmingham on Friday have centred around the make-Britain-great agenda.
Michael Gove, the new chancellor of the Dutchy of Lancaster reflected over the weekend on the government’s number one priority: ‘preparing the country to leave the EU, come what may, on October 31’. We are also hearing much talk from the government of no-deal being a very real prospect. This is the new mantra.
One of the biggest reflections of his first days in office: the departure, by sacking or resignation of 15 cabinet ministers. This senior and determined group of backbenchers – former chancellor, Philip Hammond chief amongst them – will be the focal point of opposition to a no-deal Brexit. The new leader had spoken of ‘love-bombing’ the parliamentary party at a meeting of the backbench 1922 committee last Tuesday evening, on the day of his election. The reality over the next day confirmed the true face of the new government – this was a takeover of the Vote Leave campaign. Most others were out.
The Commons is going to be the scene of showdown over Brexit. In domestic policy, the team reflects on what parliament may be faced with in the coming months. Worth a reminder that without a majority in the Commons and with a party split over the approach to a no-deal Brexit, getting legislation through the Commons is going to be very difficult. Our political + public affairs team is on hand to navigate these first months of the new government, to respond to challenges and find opportunity to shape policy.
Daisy Thomas from our Healthcare practice reflects on what the new government means for health:
As temperatures soared in the UK last week, opponents of the new PM revelled in commenting that he had appointed the ‘cabinet from hell’. Some consistency at least for health, where Matt Hancock stays on as secretary of state, despite being widely tipped for promotion. In recent weeks Hancock had worked on the domestic policy agenda in the Johnson campaign, with an eye on the Treasury.
NHS spending was at the centre of the Vote Leave campaign and so it was no surprise that the NHS featured prominently in the PM’s first speech. Johnson’s team is said to be very keen that the government’s prioritisation of the NHS is felt at the frontline, which is clamouring for an urgent increase in capital spending. There is now expected to be a swift and significant investment in an NHS rebuilding programme.
And the NHS isn’t the only area of health where the new PM needs to stump up the cash. There is a huge challenge ahead to fix the adult social care system, which is failing the people who rely on it and placing immense pressure on families and carers. But solving this means tackling the perpetual question of how to pay for care in the long term, when the population is ageing and the number of long term conditions are rising.
Matt Hancock ‘may’ have buried the Prevention Green Paper given Johnson’s well-known views against sin taxes, but the government cannot ignore the serious public health challenges facing the country and the flatlining life expectancy. The health minister is likely to quickly reassure that the population’s health remains a key priority. He will also double down on his technology passion project, with the digital transformation agenda continuing apace.
With 13 weeks to Brexit and NHS Trusts told to prepare for a no deal, the coming months could well be unlucky for some. And they might also leave the PM wishing that there was an app for that.
Tilson Pinto from our Technology practice takes a look at what the new government means for tech:
UK plans for a digital services tax on large technology companies are likely to press ahead under Johnson, who has already declared his support for new taxes on tech giants, citing current arrangements as ‘simply unfair’ to the high street. He joins a growing number of lawmakers worldwide calling for multinationals to pay their ‘fair’ share in countries, where they do large amounts of their business.
Despite Johnson’s references to technology during his time in the public spotlight, there is not much to suggest what his digital policies will be. The few things we do know is that Johnson has historically voted against broader surveillance authority in the 2016 Investigatory Powers Act but he has not contributed to any debate on the Online Harms White Paper.
If his time as Mayor of London is any indication, Johnson is likely to give connectivity greater weighting amongst his priorities. As mayor he outlined plans to make London the ‘technology capital of the world. Among those plans, Johnson pledged to blanket the city with Wi-Fi by 2012 and 5G by 2020 to ensure London had the digital infrastructure needed to remain competitive. Johnson’s connectivity plans as PM are equally ambitious despite having fallen short of his previous promises. Writing in a column for the Telegraph in June, Johnson pledged full-fibre broadband for everyone in the country by 2025, ahead of the government’s own 100 per cent roll-out by 2033 target. Internet service providers generally welcome the ambitious commitments but state it would need to be matched with equally ambitious regulatory changes including reform of the fibre tax, planning laws, and fibre business rates in order to accelerate the roll-out.
Johnson will be under increasing pressure from MPs and telco’s to make the decision quickly. MPs are concerned that a previous decision allowing Huawei to build non-sensitive parts of Britain’s 5G network may affect its relationship with close allies. And Telco’s are seeking more clarity on what to expect in terms of potential 5G rollout delays, as many have already started installing 5G equipment, some provided by Huawei. Johnson for his part has affirmed he would not do anything to compromise the UKs intelligence-sharing relationship with its Five Eye partners but also welcomed investment from Chinese firms as much as any other firms.
Tom Mitchener from our Financial + Professional Services practice reflects on what the new government means for The City:
While on the cards for some time, Johnson is hardly the tonic the City was after. His willingness to leave the EU without a deal is likely to accelerate firms’ plans to shift London-based employees and assets overseas. What’s more, in Sajid Javid he has appointed a chancellor who is similarly prepared to leave with no deal. Javid is on record saying he is content with such a scenario and has said that the UK has not done enough no deal planning since the vote.
Heads will turn to a possible emergency budget for an indication of where the City fits in Johnson and Javid’s plans – this is now planned for the autumn. While wholesale cuts to income tax would be widely expected, investors can also be hopeful of reductions to business and interest rates given a fiscal stimulus will almost certainly be required to offset the early effects of a no-deal. However, with Brexit set to be centre of mind for the foreseeable future, it remains to be seen whether there will be progress on stalled initiatives such as the pensions dashboard. Javid’s extensive and indeed successful City background does offer some solace to the sector, who will be hoping his expertise and ability to see things from their perspective will filter into his boss’s thinking.
Mike Blakeney from our Energy + Industrials team takes a look at the new government’s challenges in the energy sector:
The new Prime Minister is something of an enigma when it comes to energy. He supports his predecessor’s net zero target, but Johnson’s approach is very much focused on the economic opportunities of the green economy, rather than any burning desire to control emissions.
This is perhaps borne out by his appointments. Neither Andrea Leadsom, the new secretary of state for business, energy and industrial strategy, nor Kwasi Kwarteng, the new energy minister, have reputations as dyed in the wool environmentalists. Indeed Kwarteng has a reputation as an economically liberal ‘red tape cutter’ who is unlikely to be minded to increase burdens on business. And – given the Theresa May Government’s inability to publish the Energy White Paper before wrapping up – it’s entirely possible this more economically liberal BEIS will be minded to put its own imprint on energy policy.
While it’s still early days, the tea leaves suggest this new government is more interested in exploiting the business opportunities of the green economy, rather than being ideological about climate change. While this last government was hardly environmentally puritanical, it’s likely the new Government is a shift towards a more pragmatic approach on energy.