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Exactly five months ago, Boris Johnson left the intensive care unit at St. Thomas Hospital. The British prime minister had to put on a respirator due to his serious condition caused by the coronavirus. As he later admitted, it was doubtful that he could survive. The near-death experience of the prime minister has changed a lot. The failure of the earlier flock-based strategy was noted by the UK, which shows one of the worst mortality rates in Europe. Following the austerity measures, the number of daily deaths began to decline slowly but surely. The government switched to a different tactic than its initial position and moved towards a stricter epidemic management protocol.
The Cummings scandal that broke out in May also did much damage to the popularity of the ruling conservatives. The prime minister’s close political adviser said critics said he violated epidemiological measures by taking his son to his property in northern England and then taking a short drive to nearby Barnard Castle, saying he had tested his vision. . The government’s positive opinion on the management of the epidemic fell from 68% in mid-April to 41% at the end of May.
In addition to the crisis, Boris Johnson may also have had a headache with the growing popularity of Keir Starmer, the new Labor Party chairman elected in April. Former leader Jeremy Corbyn led his party to one of the biggest defeats in the history of the Labor Party in the 2019 elections, the main reason being the negative perception of the party leadership and the far-left political program for many. London-based star lawyer Starmer, on the other hand, is striking center strings, seeking to unify the party and cracking down on anti-Semitic demonstrations emerging in Labor Party circles.
The rising popularity of the opposition leader is demonstrated by the fact that, according to a YouGov poll in early August, the British would rather see the prime minister in office than Boris Johnson.
Economic disaster
The UK produced more than twenty percent of GDP in the second quarter compared to the first quarter of 2020. Among developed economies, there was no country that had suffered a greater contraction. Unemployment is low, just under four percent, but this is mainly due to the government’s wage replacement program. Some estimates suggest that without the program, the UK could be hit by double-digit unemployment rates.
The main question that has arisen in relation to the economic recession is what “shaped” the recession we are facing. The desired scenario is V-shaped, that is, relapse is followed by a rapid rebound. The Bank of England anticipates this scenario, forecasting 18 percent growth for the third quarter compared to the previous quarter. This is supported by the 8.6 percent increase in June. Some say the outlook is too optimistic and the economy will not be able to fully compensate for the second quarter slump. Pessimistic voices are reinforced by the inability of certain sectors of the economy (such as tourism) to recover quickly from restrictive measures, and the closure of the wage replacement program in October could significantly increase the unemployment that has been curbed so far.
During the first wave, the UK supported the economy to stay afloat with a bailout package worth almost £ 200bn.
In comparison, this amount is almost five times the total cost of a peaceful Hungarian budget.
One of the most important elements of this was the £ 69bn job protection scheme, the majority of which came from salary replacement support. In accordance with this, the state reimbursed eighty per cent of the monthly wages, with a maximum limit of £ 2,500. The advertised program was expanded in early summer, albeit with restrictions. The stimulus package reached almost 9% of GDP, making the UK a middle ground in advanced economies.
The Office of Budget Responsibility estimates that the budget deficit will be around £ 370bn this year, which is almost twenty percent of GDP. With such data
Public debt as a percentage of GDP will exceed 100 percent by the end of 2020.
Due to the growing deficit, Finance Minister Rishi Sunak has proposed tax increases, which will be outlined in the fall budget. However, the big question is whether austerity will push Britain’s already weak economy into a major crisis. Of course, the program can also come at a serious political cost, especially in the current scourge.
Brexi?
In the midst of the economic crisis and the virus situation, of course, we must not forget the issue of recent years, Brexit. The UK formally left the European Union on January 31, but the rules for the so-called transitional period remain in effect until the end of the year. As part of this, the British will remain members of the customs union and the single market, and the rules on immigration and emigration will remain in place until the end of the year. Johnson aims for the United Kingdom to conclude a comprehensive free trade agreement with the European bloc by December 31. However, the outcome of the negotiations remains doubtful.
In early August, Michael Gove, the secretary of state who heads the prime minister’s office, said that “all the evidence shows that significant progress has been made with the European Union” and “believes in the successful outcome of the negotiations.” . Contrary to this, Downing Street and EU chief negotiator Michel Barnier said in early September that there was less and less chance of the two negotiators reaching an agreement before the end of the year.
The biggest conflicts have arisen over state aid to British companies and fisheries policy. The European Union would make it a condition of NAFTA that the UK state should only support its own companies in accordance with EU rules so that they do not gain an “unfair” advantage in a single European market. The British government strongly rejects the EU request, and exit parties in the Brexit campaign consistently highlight the independence of state aid as a possible positive benefit of exit. With regard to fisheries policy, the UK wants to move away from common EU fisheries rules, which allow European fishermen to operate in waters under British sovereignty. Fishing is of minimal importance to both the UK and EU economies, and is primarily an emotional issue, as evidenced by the argument of the exiting parties to ‘get our waters back’.
The key question, of course, is what happens if the UK and the EU fail to reach an agreement by the end of December. In this case, trade between the two parties would have to take place in accordance with the rules of the World Trade Organization, which would allow the imposition of duties on both the European Union and the United Kingdom. According to a UN study, in the no-deal scenario, UK exports to the EU would fall by 14 percent, but even with a deal, exports are expected to fall by almost nine percent. It is questionable to what extent the two sides can afford to bear the cost of even a possible no-deal scenario amid the crisis caused by the coronavirus.
Political perspective
The ruling British Conservative Party as a whole is no worse in the polls than it was in last December’s general election. At the time, the Conservatives won a majority of 80 in the House of Commons, while the Labor Party suffered a historic defeat. The challenge for the Conservatives could be that their main rival has now caught up and reduced their deficit to 3-5 percentage points. Due to the British electoral system, which is entirely based on individual constituencies, it is difficult to say how parliamentary power relations would develop on the basis of current party support. Boris Johnson’s party would presumably retain its majority in the House of Commons, but its parliamentary dominance would prefer to crumble from the earlier 1980s, which could easily result in an outbreak of internal tensions.
Boris Johnson is fortunate that the next general election is scheduled for 2024.
However, next year’s long distance elections could be challenging, where the rising popularity of the Scottish National Party could easily materialize. Nicola Sturgeon, the party chairman, has announced that if they win a majority in the Scottish parliament next year, they will again start an independence referendum. Downing Street firmly rejected the plans. The extent to which the British government is able to stop the new referendum initiative by legal means is questionable and, needless to say, the expected results of a possible referendum are also unpredictable based on the current state of the polls.
So a shaky fall is ahead of Boris Johnson. The unfavorable epidemiological outlook, the deteriorating budget balance, the emerging nightmare of the no-deal Brexit would be enough by themselves for the ruling party to pay a significant political price for the mistakes made. Of course, not all rounds are underway, a rapid V-shaped rebound in the economy, a free trade agreement between the UK and the US In the event of Trump’s re-election, and a developed coronavirus vaccine could solve the problems described above. Of course, Boris Johnson would not witness too good a sense of royal politics, if only to hope for the lucky coexistence of the stars.
Top image: London Prime Minister’s residence in an image posted by Downing Street 10 British Prime Minister Boris Johnson will hold a press conference on the coronavirus situation at Downing Street 10 on June 3, 2020. MTI / EPA / Residence of the Prime Minister of London / Andrew Parsons
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