Boris Johnson was a very good London lord mayor and knows that as the 2019 Prime Minister he must inject a spirit of optimism around Britain.
He is an admirer of Churchill’s ability to maintain optimism during the war. Johnson has very powerful weapons to generate community optimism by first attempting to pull Europe back to the negotiating table and then, assuming that fails, opening up a new future for Britain.
If he pulls those UK prosperity levers then there will be impact on Australia.
And as I will describe below, like Australia, many in the UK tax office regard attacking small business as a legitimate sport. Again, like Australia, an essential part of energising the UK requires Johnson to stop the UK tax office’s abuse of smaller enterprises.
If Johnson goes down that tax path he will attract considerable support from those who oppose Brexit. It’s an essential component of unifying the country.
Incredibly Theresa May was promising to pay the Europeans £39 billion for a concoction of obligations the Europeans had made up. That’s fine if the exit deal is a good one but May not only negotiated a bad exit deal but that deal still required the UK to make the payments. Crazy.
Lever one to improve the UK outlook is to take that cash offer off the table unless a satisfactory Brexit deal is agreed to. This immediately puts pressure on European budgets because they were looking forward to harvesting the UK money.
Lever two: Take President Trump’s advice and sue the Europeans for a much larger sum for an alleged concoction of EEC errors that were very costly for the UK. That will keep the courts busy for a decade or two so Johnson can set about spending the £39 billion in the UK to maintain or increase prosperity. Some of that money will go to Scotland and Northern Ireland if they stay with the UK.
Lever three: President Trump is offering the UK a trade deal that will be more beneficial than membership of the EEC. Take it. If that happens then the UK, trade-wise, would become akin to a US state without the legislative ties.
Lever four: Defence becomes a key negotiating card. Europe depends on the UK and NATO for its defence at a time when there is great concern about Russia. I don’t have the knowledge to prescribe a detailed defence way forward but the components are there for the European community to be required to divert big additional sums to defence. Add that to the £39 billion.
Lever five. Thanks to the work of Boris Johnson’s predecessor as London’s lord mayor, and Johnson himself, London if a very successful city at a time when New York is in decline. Get it right and London will stay a world centre.
Australia needs to move quickly because many of the low cost US agricultural products will compete with Australia. We must have a similar deal. And a close alliance with the UK could potentially divert US attention away from Asia.
In the UK, businesses have to pay what is called a National Insurance tax (NI) of 13.8 per cent on people they employ. But if they use self-employed people, the businesses don’t pay because there are no employees and the risks are covered by the prime contractor.
So the UK tax authority thought it would be good sport to impose the tax on the self-employed by trying to declare self-employed people to be employees. They are not employees and in many instances the tax was paid twice. Chaos reigns.
Back in 2017 public sector authorities aiming to improve their budget promoted a loan scheme. Because it was being pushed by the government large numbers of UK self-employed people agreed to it. Now the UK tax authorities are trying to bankrupt them for joining a government promoted scheme. Maybe the UK people were inspired by the Australian Taxation Office, which tries to bankrupt people who take research grants.
The UK House of Lords conducted an inquiry into the behaviour of the UK tax office, which is called HM Revenue and Customs (HMRC).
The December 2018 report said: “HMRC appears to be prioritising recovery of tax revenue over justice by targeting individuals.”
As in Australia, if the UK conservatives are to stay in power they must have the small business community support. Boris Johnson will know that.
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