Boris Johnson’s Big Giveaway

This isn’t the fourth term of a Conservative government but the first term of a Boris Johnson government – and if the distinction isn’t clear now, it will become more so over the coming months. The Prime Minister’s agenda, revealed today, is about spending: on schools, the health service, scientific research, housing, infrastructure, even the exploration of space. It’s a plan not just for the next year but for the next decade: quite something for a Tory government which, at the start of last week, didn’t know if it would survive until Christmas…

The Queen’s Speech is all very red Tory – or blue Labour, depending on which side you’re cheering. The NHS goodie list of more hospitals, doctors, nurses, free car parking spaces etc would have been the highlight of any New Labour manifesto. Then there’s a minimum wage, to be raised so high that it will soon cover one in every six people working in Britain. We have a three-year school spending splurge, an “infrastructure revolution,” even faster broadband. By the end of it, Jeremy Corbyn was complaining that his ideas had been stolen.  

It was a bulging Santa’s sack of goodies, more generous than any offered by any previous Tory Prime Minister…

So his Queen’s Speech wasn’t just a cynical ploy to bribe northerners. It does what he has always wanted to do: borrow money, lots of it, and see if he can bring to the north of England the opportunities that he thinks decent infrastructure has brought to London. Javid is quite right to say that the markets, relieved at the absence of Marxists in the Treasury, are still keen to lend at ridiculously cheap rates of interest. Just how long those rates will stay cheap for, however, is another matter.

And this is the problem. If you can borrow money for the next decade at rock-bottom interest rates, and get more than your money back on investments that speed up the economy, then it does make sense. But what if rates rise? And anyway, can government be trusted to spend wisely? At the root of every debt crisis in history we can usually find someone arguing for a massive debt binge on the grounds that “this time is different”. It seldom is. If another debt crisis strikes, the “infrastructure revolution” might end as a graveyard of half-finished projects.