The new Prime Minister Theresa May has begun to form her new government. The most senior appointments were made yesterday evening with further cabinet roles to begin later this morning. More junior ministerial roles and the appointment of advisers will follow in the coming days.
The following appointments have been announced so far:
- Chancellor of the Exchequer – Rt Hon Philip Hammond MP.
- Foreign Secretary – Boris Johnson MP.
- Home Secretary – Rt Hon Amber Rudd MP.
- Secretary of State for Brexit – Rt Hon David Davis MP.
- Secretary of State for International Trade – Rt Hon Liam Fox MP.
- Defence Secretary – Rt Hon Michael Fallon MP.
George Osborne, Michael Gove, Nicky Morgan and John Whittingdale have left government.
Theresa May is approaching her reshuffle radically rather than just tinkering at the edges. There has been speculation that there could be wider ‘machinery of government changes’, with the structure of departments altered.
Implications
From the appointments so far, and from the Prime Minister’s speech in Downing Street yesterday, we can conclude the following:
‘Brexiters’ will shape Britain’s new global role
The initial appointments suggest Theresa May has given Brexiters’ ownership of shaping the future of the UK outside the EU. While Fox and Davis were not prominent in the Vote Leave campaign, they are longtime eurosceptics on the traditional right of the party and will now negotiate vital trade deals and the EU exit respectively. Johnson’s surprise appointment as Foreign Secretary completes the Brexit credentials of May’s most prominent cabinet members and will go a long way to appeasing the right of the Conservative Party.
Cleverly, she has tied those who advocated leaving into ensuring it is implemented. This gives them responsibility and, critically, reduces the chances of them criticising from the sidelines.
Austerity is not necessarily over
It has been widely reported that Theresa May’s new government signals the end to fiscal ‘austerity’. While she has promised to abolish the government’s target of achieving a budget surplus in 2020, there is little evidence her decision means planned fiscal consolidation has come to an end.
The new Chancellor, Phillip Hammond, was previously Shadow Chief Secretary to the Treasury, and if the Conservatives had not been forced into coalition with the Lib Dems would almost certainly have entered the Treasury six years ago as George Osborne’s deputy. He was an early proponent of a stricter fiscal approach and is seen as a fiscal ‘hawk’.
His immediate focus will be on bringing back stability and confidence in the economy and financial markets. An economic slowdown as a result of the referendum or Brexit will make a surplus harder to achieve. With May and Hammond likely to resist tax rises, any significant deviation from austerity in the short term seems unlikely.
Progressives set for domestic roles
The appointment of Fox, Davis and Johnson to the key external facing roles that will create Britain’s future global relationships, gives May space to appoint more centrist and progressive figures to the key domestic roles. It is possible that the new Prime Minister will look to appoint some of those from the more liberal wing of the party, who supported Remain, to deliver the radical social justice agenda that she set out in her speeches outside Downing Street and in Birmingham earlier this week.
Traditional conservatism overseas with a tougher approach to immigration, combined with a progressive domestic policy agenda is emerging as May’s proposition to her party as winning package for the next election.
Next steps
A full picture of the impact on individual departments and the responsibilities of specific ministers will take May and her top team some time to finalise. However, by the end of this week, we should have a clearer sense of the effect on each department.