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Britain’s economic troubles force its politicians to think the previously unthinkable

London Letter: Despite ebbing confidence in his leadership, the PM is not for turning

Three days after nearly half of his MPs said they had no confidence in his leadership, British prime minister Boris Johnson went to Blackpool on Thursday to launch the latest reset of his government.

Ranging across an array of economic and trade policy issues, Mr Johnson promised to make it easier for people on social welfare benefits to buy houses but admitted that he could not guarantee how many new homes would be built. He said he was on the side of British farmers who wanted protection from foreign competition but he also stood with consumers who want cheap food.

“We do not grow many olives in this country that I’m aware of. Why do we have a tariff of 93p per kilo on Turkish olive oil? Why do we have a tariff on bananas? This is a truly amazing and versatile country, but as far as I know we don’t grow many bananas, not even in Blackpool,” he said.

He reeled off his government’s spending commitments on everything from health to help with fuel bills and promised to cut taxes. He said the government could save money by getting rid of tens of thousands of civil servants, giving public service workers a real-terms pay cut and closing ticket offices in railway stations.

“The answer to the current economic predicament is not more tax and more spending. The answer is economic growth,” he said.

The Organisation for Economic Co-operation and Development said this week that it expects Britain to experience no economic growth at all next year. Its forecast of 0 per cent for Britain is the lowest for any G20 country apart from Russia.

Britain’s economic troubles have prompted some politicians and commentators to think the previously unthinkable by advocating closer economic ties with the European Union. It started with Conservative MP Tobias Ellwood’s call last week for Britain to join the EU single market, which was widely dismissed as unrealistic and counterproductive.

But Ellwood’s intervention reflected the real difficulties faced by British businesses as they face higher costs and bureaucratic hurdles if they want to export to Europe. British farmers complain that the post-Brexit payments system that replaced the Common Agricultural Policy is more cumbersome and less generous.

Scientists are unhappy about their exclusion from the EU’s Horizon programme and musicians are finding it harder to tour in Europe because of visa requirements. Some Brexiteers are disappointed too because hopes of a bonfire of regulations have been thwarted by the government’s fear of upsetting sectors such as agriculture.

Iain Martin, an unrelenting critic of the EU, acknowledged in a thoughtful column in the Times this week that the Brexit record was mixed.

“Accept that in a pragmatic fashion and the question quickly becomes what should Britain do in practical terms to improve the parts of the new arrangements that do not work,” he wrote.

Martin advocates bespoke trade arrangements but he recognises that no progress is possible as long as Johnson persists with his “lawless antics” on the Northern Ireland protocol.

In a speech at the European University Institute in Florence on Thursday, former British ambassador to the EU Ivan Rogers argued against revisiting big questions about the single market and the customs union and said any new agreements should instead be bottom-up.

“It will clearly need a serious package of potentially deliverable agreements in order for there to be enough political interest in it on both sides — on a whole series of pragmatic things where both sides know the present settlement is either deficient or silent,” he said. “That is no easy matter. But there is a plethora of those — from a new mobility agreement which addresses some of the more damaging lunacy of the current settlement, to an asylum and readmissions legal agreement, from defence procurement to research and scientific co-operation, from deep energy and food security co-operation and climate finance.”

Rogers is optimistic about the long-term prospects for a deep, effective partnership between Britain and the EU but he agrees that there will be no progress while the dispute over the protocol endures and the relationship will continue to be bumpy, conflictual and tortuous.

“It may well get rougher in the coming months, essentially because of the narcissist politics of self-preservation which will continue to dominate in the UK,” he said.

“The job for everyone who cares about the relationship and about the future of our democracies facing far bigger first-order challenges is to look beyond that and find the ground on which to start building.”