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Today’s Queen’s Speech is the first in a decade where we can confidently predict the legislative agenda will be delivered. With a parliamentary majority of 80, Boris Johnson now has more freedom to govern than any Prime Minister since Tony Blair in 2005. But the majority he won came from seats gained across former Labour heartlands in Wales and the north and midlands of England. That gives the Conservative parliamentary party an entirely new character that will have a significant impact on its approach to government. So what can we expect?

Get Brexit done…and then move on, quickly.

The first priority will be to get Brexit done. All Conservative candidates pledged to back the Withdrawal Agreement and leaving on 31st January is a formality. The trickier task will be agreeing a trade deal with the EU so that the UK can secure an orderly exit from transition arrangements at the end of 2020.

Boris will want to frame the 31st January as having delivered Brexit. As much as anything, exiting the EU at the end of January means trying not to talk about it as much. That should mean trying to make crucial trade talks much less high profile than the exit agreement negotiations.

Many commentators claim that it will be impossible to agree a trade deal in the available time, and that an extension to the transition phase is unavoidable. However, the new government has already signalled that it intends to legislate to make any further extension illegal. Moreover, those hoping that a large majority will mean Boris Johnson softens his approach to the trade talks should lower their expectations. Whilst he is no longer beholden to the ERG for a parliamentary majority, he has no intention of rowing back on the commitments he made to Brexiteers about the length of transition or the future trade deal he will seek to achieve.

So we can look forward once more to a prolonged period of brinkmanship with the EU as the clock ticks down to a new cliff edge. That once again raises the spectre of a no deal Brexit, but perhaps the most likely outcome is one suggested by Theresa May’s former Chief of Staff, Gavin Barwell, who recently speculated that the UK could secure a ‘skinny’ free trade deal to allow an orderly exit from the transition, which is then gradually built up over time.

The voters have changed the Conservative party

Brexit will still dominate British politics but the new government is determined to press ahead with a dynamic domestic agenda. Conservatives are acutely aware that many former Labour voters ‘lent’ the party their vote in this election and there is significant work to be done to retain their trust at the next election.

The focus will therefore be on delivering the key themes of the manifesto, including investing in key public services like the NHS, education and the police with the aim of making sure voters see tangible benefits in five years’ time.

Levelling up the regions via a big boost in infrastructure spending is also likely to be an early priority. Sajid Javid’s new fiscal rules potentially mean a £100bn Infrastructure Fund over the course of this Parliament. Politically, ministers will want to make sure this benefits the smaller towns of the north that had previously formed Labour’s ‘Red Wall’.  Proposed increases in science and R&D spending are also likely to be refocused around regional growth.

Crucially, this much more populist agenda may mean a very different approach from this Conservative administration to the one pursued by its predecessors. On key issues like prioritising public spending over tax cuts, and the role and size of the state, there is likely to be a shift leftwards which may be offset by a much more vigorous traditionally right wing agenda on issues like law and order.

To enable this significant change, No.10 plans a big reshuffle in February alongside potentially quite significant changes in the machinery of Government. This could include merging the Department for International Trade with BEIS to create a powerful department to oversee two key priorities; doing trade deals with the likes of the US, whilst focusing on economic development in the north. No.10 have also been briefing that up to a third of ministers will be sacked with a much greater focus on selecting ministers with expertise and proven ability to drive through change. This could see No.10 reaching beyond the parliamentary party to make some ministerial appointments.

What does this mean for business?

A more populist government will change the relationship between business and the Conservatives.  The announcement that government ministers will not be attending the World Economic Forum in Davos shows that there will be a conscious attempt to set themselves against distant global business elites.

However, there will be opportunities and a key interaction with business is likely to focus on attracting private sector investment into the north and midlands, targeting emerging industries in advanced manufacturing, technology and renewable energy. This provides an opportunity for business to shape the government’s wider trade policy but also the kind of incentives that would be required to attract private sector investment.

 

If you would like more information on what the Queen’s Speech means for your business, or to learn how Lexington’s team of public affairs experts can support you, please contact lloyd.milton@lexcomm.co.uk 

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