Johnson’s speech light on policy – but does it matter?
Boris Johnson’s first speech as leader and Prime Minister to the Conservatives’ annual conference this week was heavy on jokes and light on policy. Ultimately, the speech served two purposes. The first was to preface the letter sent by the Government to the European Commission on the UK’s new proposals for the withdrawal agreement. The second was to rally the party faithful behind the leadership ahead of the impending general election. Measured by the latter, the speech was a success; those in the hall lapped it up. It is easy to be dismissive of Johnson’s almost relentless light-heartedness and reluctance to engage on policy detail, against the backdrop of the new Brexit proposals being sent to the EU and discussed at cabinet, but the mood in the conference hall is important. An election is coming, and Johnson desperately needs his party to carry some optimism into what will be a tough campaign. His speech will undoubtedly have helped with this.
Javid leads on minimum wage increase
Where there was some policy was in Chancellor Sajid Javid’s speech, which pledged an uplift in the national minimum wage for workers over the age of 21 to £10.50 per hour by 2024. On current trends, this could mean workers earning as much as 70p more per hour in sectors such as social care, early years and retail over the next five years. Far from being controversial, much of the criticism of Javid’s announcement was that the increase is not quick enough – Labour is proposing a £10 hourly rate as soon as it enters government. At a time when areas of political consensus appear few and far between, there is resounding cross-party support for a higher wage floor. Any businesses employing workers at or near the minimum wage need to prepare for further significant increases over the coming years, whichever party is in power after the next election.
Could inheritance tax be scrapped?
Outside of the main conference hall, one of the main talking points was the Chancellor’s suggestion in a fringe event that abolishing inheritance tax is ‘on his mind’. Conservative opposition to the tax is not new, and a move to abolish it would certainly play well with the party’s core voters. However, it brings a significant amount of revenue to the Treasury coffers – over £5 billion last year – at a time when the Government is making a number of spending commitments. While Johnson and Javid have framed this conference as making Britain a low-tax, high-pay economy, scrapping – or even reforming – inheritance tax would be difficult to achieve. They may settle for replicating David Cameron and George Osborne’s move of a significant increase in the threshold, or even explore shifting the tax burden onto the recipients of inheritances rather than those bequeathing, but neither will be easily done in the current political environment.
Jamie Cater, the brains behind a lot of GK’s thinking, leads our policy work across the entire business, supporting our strategic communications work and providing strategic advice to investors during M&A activity.