a national infrastructure investment bank, a “levelling-up fund” and a few ideas for shifting some Treasury mandarins to the North. And, er, that is about it.
This week – on Dec 12 to be precise – it will be one year since Boris Johnson’s administration was returned with a thumping majority. It was the first Conservative government with a clear mandate since Mrs Thatcher was re-elected in 1987. It swept into office on a promise not just to complete our departure from the European Union but to reboot economic growth and to level up the regions.
So far, not much has happened.
Sure, we know the Covid-19 crisis has overwhelmed everything else, yet in truth that doesn’t mean the Government can’t do anything apart from deal with the virus. From reforming business rates, to simplifying the tax system, to working out a legal structure for the gig economy, to rolling back a tide of regulations that stifle innovation, it could have done far more by now.
It is not too late to change that – but if the Prime Minister and his Chancellor don’t start soon, it will be.
Rewind a year, and we might have been expecting to toast the first year of a great reforming administration. Johnson was elected with a big majority, promising not just “to get Brexit done”, but once it was completed to reboot the economy with a wave of infrastructure spending and entrepreneurial energy.
It was a positive, optimistic vision. According to the manifesto, the Government would “back entrepreneurs and innovation”, “build a fairer taxation system”, “make Britain the best place in the world to start and grow a business”, “ensure that regulation is sensible and proportionate” and “level up Britain’s skills”.
Everyone takes manifestos with a generous pinch of salt, and no one imagines that every goal will be met. Even so, you could certainly be forgiven for coming away with the impression that Johnson’s administration would be pro-business, pro-enterprise and pro-growth.
Of course, no one expected a global pandemic that would hit the UK as hard as any country in the world.
Dealing with Covid-19 has understandably been the Government’s main priority. The Treasury has been caught up in creating rescue schemes to keep the economy afloat rather than in long-term planning.
Even so, as the crisis drags on and the arrival of effective vaccines promises to finally bring it to an end, that excuse won’t work forever. Companies have been getting on with creating and launching new products even while adjusting to the impact of Covid-19. There is no reason why the Government shouldn’t also be putting the reforms in place to drive faster economic growth.
Other Conservative governments with similar majorities did far more. The 1987 Thatcher administration was, of course, the most radical of all, making huge changes to the tax system; as well as cuts to the top rate that included huge structural reforms, such as the tax treatment of married couples to treat women equally to men and even a brave if doomed attempt to reform council taxes.
Edward Heath in 1970 may be a largely forgotten figure – he was given about 10 minutes in The Crown – but he at least tried to liberalise the economy before being defeated by the unions. Even the Churchill/Eden/Macmillan government of the Fifties ended rationing and austerity and kickstarted a spending boom.
Even with the pandemic raging in the background, it could have done so much more. With retailing in crisis it could have put together plans for a fundamental reform of business rates so that taxes didn’t push even more shops into bankruptcy and leave the high street with nothing but tax-exempt charity shops.
It could have created a new class of “gig worker” that reshaped employment law so it worked for the emerging flexible app economy and didn’t simply try to fit everyone into a 20th-century, industrial straight-jacket. Gig workers could have some of the rights and responsibilities of traditional staff, but they would also have a lot more freedom and flexibility, and their employers would face the full nightmare of employment law.
It could have rebooted the Enterprise Investment Scheme (there was a worrying decline in the amount of money raised last year, taking it down to the lowest level since 2014) to make it more attractive to entrepreneurs and investors.
It could have borrowed some ideas from Donald Trump, with rules to repeal two regulations for every new one introduced. And it could have laid down plans to revamp regulatory agencies so the UK embraced new technologies from driverless cars to lab-grown meats to vertical farms and drone delivery.
With its vaccine approval the MHRA (Medicines and Healthcare products Regulatory Agency) has just shown how regulators can speed up so that they make all the appropriate checks and embrace innovation – lots of agencies could learn from this example.
That would just be the start.
The list could be a lot longer, and while those reforms would take time to work, it should have been possible to start setting out the plans, and putting the legislation in place, even while dealing with Covid-19.
It is not too late to change that, but if it is going to make any significant economic reforms the Johnson administration needs to start now. There is very little to show for the first year – and if that does not change soon it will be too late.