In a very crowded field the cruellest description of the Boris Johnson-Dominic Cummings administration is that it resembles nothing less than a Theresa May tribute act, albeit one in fast-forward mode. Everything she didn't manage to do in 3½ years was this week repeated in 3½ days.
But even May didn't manage to sneak in a public spending review that boosted government expenditure in a way not seen since the last Labour government. In normal times this would have been sensational: every spending department got more money.
Instead, given the times, hardly anybody noticed. But the end of austerity was both significant and contingent. It was, in a sense, also ironic. Wholly unnecessary fiscal austerity of the past decade was, in part, a driver of the anger that led some people to vote to Leave.
In a previous life the new chancellor (Sajid Javid) was a fan of austerity and garnered something of a reputation as a fiscal conservative, a fan of a smaller state. Like so many ideas, principles and careers, that has clearly gone out of the window.
That fiscal boost was highly contingent upon economic forecasts that are looking both old and stale. The plan is to borrow more money but try and stay within self-imposed limits. That means the economy has to grow by enough to generate sufficient tax revenues such that the extra borrowing doesn’t break the rules.
Given that the economy looks like it is currently shrinking rather than expanding we will almost certainly see those borrowing projections rise, probably substantially.
Boris probably doesn't care about Brexit in any fundamental sense. His priority is winning the imminent general election. His chief aide, Dominic Cummings, doesn't care much about that election but is passionate about delivering Brexit.
Cummings has convinced Johnson that the only way to win the election is via a hard Brexit. Whether that’s a promise of no-deal or its actual delivery is secondary. Uniting the Leave factions will give the Conservatives around 35 per cent of the vote.
All the evidence is that the opposition camp is incapable of running a bath, let alone a unified election campaign. Cummings’ thesis is, therefore, easy to understand – 35 per cent will, under the UK’s first-past-the-post electoral system, give you a thumping majority over any disorganised rabble. That thesis still holds.
Rebel alliance
There was much talk this week about the flaw in Cummings’ strategy: he has achieved the impossible and united the disparate opposition to no-deal. Let’s see how long that lasts. The so-called rebel alliance comprises hard line Remainers, fans of May’s original deal, People’s Vote campaigners and Scottish nationalists who sniff a second referendum of their own.
It shouldn't be too hard to exploit the obvious weak points of this rather weird coalition. Jeremy Corbyn is widely described as just having had his best week ever in politics, but I defy anyone to explain Labour's Brexit policy.
Extremism is clearly both intoxicating and addictive. The British electorate will be faced with choosing between a Tory party that has been hijacked by the extreme right and a Labour Party run by self-described Marxists.
Sterling rallied, a little, when hard Brexit became less likely, when the Johnson-Cummings plan looked like it had run into a ditch. Sterling went up when the central policy of business friendly Tories was thwarted. Just one of many bizarre aspects of all of this.
But sterling’s rise is premature, if not a false dawn. Cummings can and will exploit the weaknesses of the opposition and run a people versus parliament populist election. I would put money on the Tories winning that one.
Cummings just needs to figure out how to get the election called. That could be as simple as a short parliamentary bill (we are all constitutional experts now) or persuading Corbyn to fall into what is admittedly a very obvious trap. Corbyn can’t hold out for very long: he’s spent his entire leadership making daily calls for a general election.
So I see an election in the next few months, with every likelihood of a Johnson victory. The two obvious ways that forecast could be wrong are either Corbyn becomes PM or he holds out and keeps Johnson in political purgatory: in power but also still in the EU.
Extremely painful
All possible outcomes pose risks for the economy. Most plausible scenarios involving Johnson winning should also assume a no-deal Brexit. A Labour victory will look like a rerun of the 1970s but without the Sex Pistols. Purgatory will not be forever but will, as it’s name suggests, be extremely painful.
Ken Clarke, one of the purged Tory rebels, became an MP when Boris Johnson was six years old. His wise words should be listened to. He correctly describes the current situation as highly unstable.
Anything could happen. I’ve sketched out how I think things will go but admit that my confidence levels are not high. The only thing that is in abundance is uncertainty, something that is never good for the economy.
A big worry is that the appetite for political extremism has yet to be sated and is, in fact, growing. Yesterday’s unthinkable becomes today’s new normal. Some lawyers are war-gaming the unthinkable: what happens if the government ignores the law and delivers no-deal? All of this is so corrosive.
