Reflections on Johnson and Davis

As we learn that we have a new Secretary of State for Northern Ireland (but not, as I write, knowing who), I wanted to reflect on the two most controversial appointments to Theresa May’s cabinet.

Either the appointment of Boris Johnson and David Davis as Foreign Secretary and Secretary of State for Brexit respectively is a stroke of brilliance or they will be an unmitigated disaster.

Davis wrote an essay on Conservative Home with his thoughts on how the Brexit process would proceed, which (unsurprisingly) differs from my own analysis.  I still stand over my opinion that free trade deals with the rest of the world are worth relatively little unless they work to the good of our exports, but his analysis on the subject of vehicle manufacturing ignores the fact that the EU being a bigger market, WTO tariffs will cost manufacturers more exporting to the EU than if they move production so that they export to the UK.

Johnson’s behaviour towards the rest of the world doesn’t need me to link any articles, but you could try Google. (Oh, all right, just the one.)

It all hangs on how things go for them.

Johnson may find his behaviour reined in by having to stick to the Government line, and not having the same freedom to write as he pleases in the Spectator.  It could, as they say, put some manners on him, or the restrictions that come with the role might be too much for him.  Either way, he is neutralised as a politician.

There are three possibilities for Davis, and only one is good for him: acquiescence of the EU to UK demands.  It is also by far the least likely, as I may have mentioned once or twice (EDIT: let alone the chances of International Trade Secretary Liam Fox reaching non-EU trade deals before Article 50 notice expires as Davis has so confidently predicted)

If he achieves a good measure of what he hopes for, he will have been a worthwhile appointment.  If he fails, getting pretty much what I personally predict, especially with regard to the non-negotiable nature of free movement within the EEA, his political career is over – and so will the Leave campaign.

And what for the Prime Minister?  She has effectively invited Johnson and Davis in particular to put their money where their mouths are.  Failure carries the risk of being dragged down with them in 2020 (we can probably rule out a snap election this autumn), but she may be banking on it being more likely that their success or political neutralisation will secure her place as Prime Minister.

A final word on the Conservative home blog.  Davis refers to consumer-led economic growth being built on debt, and he is correct that this is unsustainable.  The problem is that in the absence of consumer demand, economic growth is impossible: why innovate and develop products that noone can buy?  This dilemma is what gives the lie to “trickle down” theory, because while it promotes economic growth at supplier level, unless the trickle is big enough, stagnant consumer demand will kill growth off – and sustainable consumer demand can only be built with better wages relative to prices (a side effect of Henry T Ford‘s setting of wages to save money on staff turnover, recruitment and training) and thus better distribution of wealth.