• English
  • Deutsch
  • Brexit

    Apart from Brexit, Boris Johnson has more big challenges ahead of him

    March 2020

    There is an old superstition that bad things come in three. British Prime Minister Boris Johnson may be about to find out if that is true. The first of Mr. Johnson’s woes is obvious. He claimed that by the end of January Brexit was in some magical way “done.” In my opinion, this is by far not the case. Formally leaving the European Union marks just the beginning of a long Brexit process. The big question for the UK remains, what kind of deal they can expect from the organization it has rejected?

    Mr. Johnson has a cunning plan. That is in my opinion, to pursue negotiations with the United States on a trade deal at the same time as discussions with the European Union are ongoing. Fine in theory, but Britain lacks skilled trade negotiators and trade talks are technically complex and boring – not Mr. Johnson’s forte at all in my opinion.

    Yet of the three big foreseeable difficulties ahead, Brexit is perhaps the least of his worries. He has shown what supporters call “flexibility” (and opponents call weakness) in striking a deal with the EU last year – but only by making big concessions. He will get in my opinion a rapid deal with the EU if he is prepared to concede much of what they demand. His majority in Parliament gives him plenty of leverage.

    Much more delicate in my opinion are relations with the Trump administration. From April, Britain plans a new 2% sales tax on US tech giants like Facebook and Google. European countries believe that such companies avoid paying their “fair” share of tax – whatever “fair” means – by inventive accounting measures. They make sales in one country yet – within the rules – pay tax on profits in places with a low-tax environment. Steven Mnuchin, the US Treasury Secretary, threatened Britain with tariffs on British car exports if the tech sales tax goes ahead, and the Trump administration appears to have at least delayed a similar sales tax from being introduced by French President Emmanuel Macron.

    In an American presidential election year, Mr. Trump in my opinion will want to continue to look tough on the world stage. The prospect of some kind of trade war, while Britain is trying to negotiate a US trade treaty, compounds in my opinion Mr. Johnson’s problems. Plus, the Trump administration is irritated with Britain over Iran and also UK’s arrangements with the Chinese company Huawei to build so-called “non-core” parts of the UK’s 5G telecommunications network. Mr. Trump may be impossible to predict but the third of Mr. Johnson’s big problems for 2020 is the one that could truly ruin his time in power.

    Formally, as prime minister, he is leader of the “Conservative and Unionist party.” Unionism means that Conservatives are traditionally motivated by a profound desire to maintain the unity of the four nations of the UK-England, Scotland, Wales and Northern Ireland. That in my opinion is going to be very tricky. The Scottish parliament, the Northern Ireland assembly and the Welsh assembly have in the past few weeks all come out against Mr. Johnson’s Brexit bill, while Westminster parliament has voted in favor. At one level these differences mean very little. On Brexit it is Westminster that decides. But that is not how it is seen by many people in Scotland. Wales and Northern Ireland who in my opinion feel that Mr. Johnson claims to be a “One Nation” Conservative, pulling all the people of the UK together, when in fact he is a “One Nation” leader of only one nation – England – and pulling the UK apart.

    The First Minister of Scotland Nicola Sturgeon says Mr. Johnson has no mandate to take Scotland out of the EU. It is expected that she will soon outline her plans for a second referendum on Scottish independence. The first was in 2014 and independence was at that time only defeated by 55% to 45%. But major circumstances have changed over the past 6 years. But, whatever Ms. Sturgeon says, the Westminster parliament can stop another referendum from happening. And such a possible scenario may make things even worse by increasing support for Scottish independence and the alienation of Scots from Mr. Johnson’s government. This in my opinion is the heart of what may be the third and most intractable of Mr. Johnson’s upcoming problems and challenges. Does he use the carrot or the stick to keep the UK together remains for me one of the biggest question?! The “stick” would be to refuse to allow Scotland a second referendum and perhaps to threaten to cut financial subsidies that London sends to Scotland, Wales and Northern Ireland.

    The carrot would be to increase those subsidies and give those three devolved assemblies even more powers. But neither method in my opinion may completely solve the problem. That is because increasingly English voters who were behind Brexit also wonder why Scotland, Northern Ireland and Wales get a bigger share of public money than English regions such as Yorkshire and Lancashire or Tyneside.

    Mr. Johnson’s “flexibility” may help. While he calls himself a “One Nation” Conservative, he seems to me to act more as a “One Nation” Conservative.

    His one nation is that he wants to ensure his own political survival.

    That means, whatever he has promised in the past, he will do – whatever it takes to stay in Downing Street. I suggest we better buckle up for the Johnson roller coaster ride and prepare for the thrills, and maybe becoming a little queasy.