Författare: Stephen Barber Professor of Global Affairs University of Eas

The warm tributes paid to John Prescott, the former deputy prime minister who has died aged 86, reflect a memorable politician of a seemingly bygone era. While his achievements over a long career were vast, the enduring image for most people is of Prescott punching a voter during the 2001 general election campaign.

On a visit to Rhyl in north Wales, Prescott was hit by an egg thrown by a local man and responded with a left hook. The altercation descended in to a full-blown brawl in the street, all caught on camera. Prescott later joked that he told Tony Blair he had been “connecting with the public” that day.

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New Labour election campaigns were tightly choreographed affairs. The media was managed assiduously and politicians were ruthlessly kept on-message. You’d have thought that thumping a voter in the face on live television might have derailed the campaign, but Blair was able to brush it off the next day with a simple, “Well, John is John”. Prescott faced no criminal or political repercussions. He didn’t even come close to losing his job.

The infamous Prescott punch.

Funny as it seems now, the levity with which the incident was treated at the time is incredible. The idea that say, former deputy prime minister Oliver Dowden could have knocked a member of the public to the floor during July’s election campaign is unimaginable. And even if you can imagine it, the idea that it could have happened without political or legal consequence is incredulous.

Politics has of course changed in the past two decades. Blair promoted a “big tent” approach after the division of the 1980s. Where Margaret Thatcher’s attitude was to categorise those even in her own party as “one of us” (or not)– Blair’s pitch was more “if you’re not against us, you’re for us”. This approach delivered an unbeatable voter coalition in 1997 and 2001 (and into 2005).

Today, politics is much more polarised, especially given the electoral cleavage formed in the wake of Brexit, which pitted remainers against leavers and spawned a period of populist politics in which easy answers are offered to address complex problems. That means a divisiveness quite different from the ideological nature of the 1980s. It’s much nastier and can be dangerous for politicians that step out of line. Just consider the column inches and Westminster discourse devoted to prime minister Keir Starmer’s spectacles, given to him by a party donor.

So this teaches us that politics is a different place and that today Prescott wouldn’t get away with that left hook, right?

Well, no. The fact is that there has never been a time when a national politician could expect to smack a voter during an election campaign without consequence. Prescott got away with it in 2001 partly because of his authenticity – he was the “Heineken” figure who could reach parts of the electorate Blair could not. He was a working-class traditionalist whose background and attitudes reflected the lives of voters much more resonantly than his polished boss.

But there was another reason. Most people watching the incident thought, well, the guy deserved it. After all, he assaulted Prescott, unprovoked, as he went about his day. Ordinary people reflected that their own reaction would be much the same.

Plenty of people thought Prescott had a point.
Alamy/David Kendall

Ronald Reagan once remarked of politics: “if you’re explaining, you’re losing”. Starmer found himself explaining far too much about just where he acquired his new glasses, but not only because of the changing political climate. Perhaps Prescott didn’t need to explain because, like him or not, there was a very relatable, unreconstructed human on show. And that is why he is being remembered fondly on his death.

So, far from a bygone age when candidates could act with impunity, perhaps there are opportunities today for politicians to more cynically take advantage.

As prime minister, Boris Johnson’s behaviour was in a different league to Prescott’s. He got away (for a time) with breaking his own laws, repeatedly lying to Parliament, treating the constitution and public life as his plaything and dishing out dozens of lucrative public contracts to supporters – among many other sins. He was able to do this because he constructed a distinctive “authentic” image that marked him out as different from his contemporaries. But he also exploited the populism and divisiveness of today’s politics, using it as a shield against criticism.

Prescott, like Johnson, represented a kind of authenticity that meant his actions could be brushed aside – they each got away with things other politicians never could. But while Prescott will always be associated with that punch, Johnson left a legacy that history won’t treat kindly. And so, it remains to be seen, when Boris Johnson eventually dies, whether his behaviour and persona is remembered quite so fondly. Läs mer…

Donald Trump’s victory in the US presidential election has brought big questions about what it means for Nato, Ukraine, the Middle East and, of course, global trade. Faced with the threat of protectionism, and outside the EU, the UK will have to make some tough choices.

Trump was chaotic and ego-driven when he was last in the White House. And despite becoming a convicted felon since leaving office, there is little indication that he has mellowed.

On “day one”, he says he will close the border, launch mass deportations and immediately impose tariffs on Mexico, the US’s largest trading partner. He is dismissive of geopolitical tensions and has doggedly promoted an “America first” message.

This is concerning for those who worry about international conflict or the global economy. When he is sworn in as president in less than three months, Trump will discover a more volatile global landscape than in 2020. The new president could make an already dangerous world more dangerous.

There are economic implications too. Trump is no free market Republican in the mould of Ronald Reagan. His populist message to his supporters on the US economy amounts to old-fashioned protectionism: slapping tariffs on global competitors.

Aside from Mexico, which he has said will pay 25% on its exports into the US, Trump has in his sights China, which he claims will see a whopping 60% tariffs imposed. This popularist protection of domestic industries would mean longer-term damage as escalating trade wars and slower global growth ultimately hurt American business, jobs and inflation – irrespective of the might of the US economy.

That is one reason why Trump might be more restrained in office than his campaign rhetoric suggests. After all, tariffs from his last presidency remain in place and President Biden was not shy at adding to them on Chinese electric vehicles, batteries and solar cells. As such, America is more protectionist today than it was back in 2016.

But the threats are being taken seriously around the world, including in Whitehall where ministers are reportedly “wargaming” how the UK might respond to US protectionism.

Despite the damage caused by Brexit, the EU remains Britain’s biggest trading partner, representing about 40% of UK exports. But the US is the UK’s largest trading partner as an individual country, accounting for about a fifth of all exports and worth more than £190 billion a year. This raises the stakes economically and politically.

UK growth strategy

In her recent budget, chancellor Rachel Reeves made some unpopular decisions to tackle public finances and made clear the mission of the new government is to strengthen economic growth. This is essential given the UK economy is just 2.9% bigger today than it was before the pandemic, in contrast to the US which has grown 10.7%.

But analysis from the independent research organisation the National Institute of Economic and Social Research was a blow to Reeves. It forecast that the imposition of even 10% tariffs would hammer UK growth from an already weak 1.2% next year, to a derisory 0.4%. This would be accompanied by an inevitable rise in unemployment and prices.

There is speculation that even if Trump is serious about a new protectionist regime, Britain could be spared. But nonetheless, the unpredictability of the incoming commander-in-chief is focusing minds in the UK.

The EU single market is the second-biggest economy in the world, and Brussels will be in a powerful position to retaliate in any trade war with the US.

This represents a political dilemma for Britain. It invites prime minister Keir Starmer to join the EU in imposing retaliatory tariffs on Trump’s America and champion free trade in Europe.

Brexit has made Britain poorer by £140 billion and damaged exports to the tune of 17%. But the power of the EU is the obvious buffer against trade threats posed by Trump.

Starmer has made considerable efforts since becoming PM in July to “reset” relations with the EU. He has been at pains to make the case for the UK in Brussels (at both the European Commission and Nato HQ), New York and Washington. The big test of leadership will be the decisions he now takes and whether he is willing, finally, to make the case for Europe at home.

Shoulder to shoulder with French president Emanuel Macron for Armistice Day in Paris, but will Keir Starmer make the case for closer UK ties to Europe when Donald Trump takes office?
Abaca Press/Alamy Stock Photo

In terms of bang for your buck and longer-term economic stability, re-establishing ties with the EU is in Britain’s financial interest, though it remains sensitive politically.

Back in February, I speculated that while Britain would use the general election to put a period of disruptive culture war politics behind it, across Europe and the US there was an appetite for fresh populism and easy solutions to complex problems. This is now happening, in a series of recent European elections, extended by the recent collapse of the governing coalition in Germany.

And the perspective shift in Washington is that the president-elect is no supporter of Nato, no fan of Ukraine and no sentimentalist about Europe. Trump’s victory has only emboldened populists like Nigel Farage in the UK, Marine Le Pen in France and Viktor Orbán in Hungary, who see opportunities to stoke division and capitalise on the pain caused by rising living costs.

With so many western leaders now embattled, Starmer will be the only leader of a major democracy who is likely to still be in office at the end of Trump’s term in 2029. While there are new challenges to step up to internationally, Starmer’s hopes of a second term at home depend on restoring trust in politics and economic prosperity up and down the country. Läs mer…

In the long line of UK government budgets, this first one from Labour in 14 years will be remembered as one of the more significant. Perhaps not like those of Geoffrey Howe in 1981, which controversially cut spending in the middle of a recession, or Hugh Dalton in 1946, which heralded the massive expansion of the welfare state.

But it was certainly on a par with Gordon Brown’s in 1997 when he signalled a change in direction after 18 years in opposition. Or more ominously, the crisis management budget of Norman Lamont in 1993, delivered in the aftermath of sterling crashing out of the ERM and a collapse of government economic policy.

Reeves’ 2024 budget, by comparison, is the first delivered by a female chancellor, and the first to outline the promised change demanded by the electorate back in July.

This was a big budget but also a difficult one – which is why Reeves and Prime Minister Keir Starmer have been softening up the country for unpopular choices since they won office. A range of potential, but painful, decisions have been publicly floated since then, with government testing the water for mainstream inheritance tax increases, a wealth tax and big pension raids.

The chancellor did none of those in this budget beyond some modest adjustments which are nonetheless proving controversial. This is mainly because they were judged counterproductive, impractical or simply did not raise the funds required.

She also chose to leave alone the headline rates of income tax and national insurance paid by individuals. Of course, this decision owed more to commitments made ahead of the general election not to raise taxes on “working people” – leading to some comical rhetorical contortions in the weeks before the budget.

This all meant that she was left with a challenging path of least resistance, including an increase in capital gains tax and employer national insurance contributions (NICs).

Read more:
What Labour’s first budget means for wages, taxes, business, the NHS and plans to grow the economy – experts explain

Nevertheless, these measures represent the biggest tax-rising budget since Lamont’s in 1993 (forced upon the then-government because of the crisis in fiscal and monetary policy).

Despite tax already being at historic levels as a proportion of GDP, Reeves took an additional £40 billion in revenue. The NHS and other key public services are the winners but departments will have to make austerity-style savings, squeezing the likes of local authorities. The government has denied this will amount to austerity in reality however, given the increase in public spending.

The bold bit

Perhaps the boldest move is the plan to revise the Treasury’s fiscal rules. This risked spooking the markets, explaining why it was leaked well ahead of the official announcement.

What it does mean, however, is that the chancellor has much greater scope for capital spending over the parliament and announced £100 billion of public investment over five years including in transport, housing and research and development.

It also means that this government plans to avoid one recognisable mistake made by the Conservative-Liberal Democrat coalition government and its austerity squeeze after 2010. There, the easier choice of cancelling investment projects over current spending undermined efforts to generate prosperity throughout the economy.

Given that the key objective of this chancellor is to strengthen economic growth, it is hoped that any short-term wobbles should be calmed by the longer-term benefits. That is a big hope though given that employers will have to pay an extra £25 billion to balance this budget, which risks dampening growth elsewhere. Further OBR analysis forecasts the consequence will be lower pay and some inflation.

You wouldn’t know it from the rhetoric of the chancellor, leader of the opposition Rishi Sunak (making his final official appearance responding to the budget), or indeed critics in the right-wing press, but this budget is also the “continuity budget”.

It continues the broad approach put in place by previous chancellor Jeremy Hunt when he reversed the disastrous so-called mini-budget of his own short-lived predecessor Kwasi Kwarteng, which left markets in freefall and made Liz Truss the shortest-serving British prime minister in history.

A continuity budget?.
Treasury/Flickr, CC BY-NC-ND

Reeves’ budget very much continued the economic approach established by Hunt in stabilising markets and public finances. Had there been a Labour government in the aftermath of Truss two years ago, the decisions would have looked little different. They too would have had to reverse the measures and live within the same constraints – those of living in the real world.

The Truss administration pursued a fantasy economic policy that would not have been possible in any circumstances, but was particularly reckless in the wake of Brexit and COVID. It was Hunt who reversed this, putting the UK on the path where it finds itself today.

But there is at least one difference. Reeves has the advantage of giving her first budget speech at the beginning of the parliament and with a commanding majority, rather than delivering unpopular home truths at the tail end. Here she was able to set out at least a roadmap for the future where there is a promise of things getting better.

She hopes to get the pain out of the way early and there is no indication that this is the beginning of some sort of pattern of year-on-year tax rises. Indeed, Reeves has distanced herself from the idea. The chancellor hopes to have ended uncertainty, doing what Hunt would have liked to have done, where difficult decisions taken today pay dividends in the future. Läs mer…