Behind the Boris Johnson Resignation: The Staggering Economy in Britain
On July 8th, Boris Johnson resigned as the leader of the Conservative Party and will step down as prime minister when a new leader is found. According to the Guardian, Boris Johnson told his cabinet that the government would now focus on the election of the new successor, and not seek to implement new policies or make major changes of direction. Starting last year, Boris Johnson was overwhelmed by raging scandals. The Partygate, which he was fined by London’s Metropolitan Police for attending a party held at Downing Street in defiance of coronavirus lockdowns, made him the first UK prime minister in history found to have broken the law in office. According to Sky News, in June this year, Conservative Party chairman Oliver Dowden resigned after the party failed in two by-election, enabling him to become “the first Cabinet minister to fall on his sword in the wake of the pressure swirling around the prime minister over the partygate scandal – which has already prompted 148 Tory MPs to oppose the PM in a vote of no confidence.” Just then, his party’s deputy chief whip Chris Pincher resigned after admitting that he had “embarrassed myself and other people” following accusation from two men of a drunken sexual assault at a private club. However, “Downing Street lied about what the prime minister had known of the whip’s record of abuse” before Pincher’s appointment, according to the Economist. Though too late, Johnson apologized on July 5th, saying “If I had my time again I would think back on it and recognise that he wasn’t going to learn a lesson and he wasn’t going to change and I regret that.”
The avalanche of resignations from his government was the straw that broke the camel’s back. On July 5th, the Chancellor of the Exchequer Rishi Sunak and Health Secretary Sajid Javid, two of Johnson’s most senior ministers, resigned from his cabinet, saying they no longer had confidence in his leadership. Their departure triggered more than 50 resignations from Government, which eventually led to Boris Johnson’s own resignation.
However, in addition to the critic on Johnson’s dishonest character and disregard for the law, other voices question his incapacity of handling with the high inflation rate and other economic problems, which has now put Britain in grave dilemma.
The Office for National Statistics said “the Consumer Prices Index (CPI) rose by 9.1% in the 12 months to May 2022, up from 9.0% in April”, an unprecedented level “since February 1982”, and “the highest rate in the G7 group of wealthy nations”. The Bank of England even warned that inflation might reach 11% within months.
Driven by the soaring prices of fuel, energy and food, the high inflation rate is believed to exert further pressure on people’s living costs. Owing to Britain’s sanction against Russia, its oil and gas prices “remain at elevated levels”. According to BBC, “After a rise in the UK’s energy price cap in April, average gas and electricity prices jumped by 53.5% and 95.5% respectively compared with a year ago.” Thus, the average cost of petrol hit a record 191.53p a litre on July 4th versus 174.84p in early June and 131.76p approximately the same time last year, “while diesel is 199.03p and, in some places, above £2 a litre”, according to the Guardian and data from RAC. In terms of food, the broken supply chain in Ukrain squeezed the aggregate grain supply in Britain. Other researchers pointed out that the trade barrier after Brexit might also be the contributor. With the soaring food prices, some primary schools in England and Wales banned beef and chicken off the lunch menu, seeking for cheaper staple instead, which posed threat to the quality of school meal. As what BBC has reported, “Laira Green Primary School in Plymouth used to serve local Cornish beef for its roast dinners every Thursday, but has now switched to gammon as a cheaper alternative. Chicken is on the menu less often, replaced instead with cheaper turkey. The school is one of almost 70 around the city served by the same catering company, which is changing menus because of price rises.” Furthermore, the rocketing gas prices brought about “cucumber crisis” in Britain since the vegetables such as cucumber, chili and tomato are grown in glass houses that are heated by natural gas. Even the well-known fish and chip shops are struggling because of the extortionately priced codfish exported from Russia and sunflower oil from Ukraine, and flour, of which the price has risen over 16.3%, according to the data from Office for National Statistics. Ironically, Boris Johnson once promised to “build back batter” from the pandemic, holding fish and chips in hand. But now the high inflation rate is veering the economic growth off the course.
To alleviate the inflation problem, in June, Bank of England raised interest rates to 1.25%, but ended up with little effect. While the Fed hiking its benchmark interest rate more radically, 1 pound is only equal to 1.2 US dollars. On 6th Mar 1972, the Pound to Dollar rate reached a high of 2.649 US dollars.
While the inflation rate is elevating, the average annual GDP growth rate is staggering. As was mentioned by the Economists, “the average annual GDP growth in the decade leading up to the global financial crisis of 2007-2009 was 2.7%; today the average is closer to 1.7%. Britain is stuck in a 15-year low productivity rut. The country is forecast to have the slowest growth in the G7 in 2023.” This may in part result from the “long Covid”. Figures from the Office for National Statistics (ONS) reveal that as of 1 May this year, 2 million people living in private households in the UK – or 3.1% of the population – reported they were still experiencing Covid symptoms more than four weeks after their first suspected coronavirus infection. In April, the Personnel Today reported that “long-term illness has driven the loss of around 200,000 people from the labour force, and other pandemic factors – including people who have dropped out of work for no specific reason – has resulted in a further 200,000 departing from the labour market.” The Institute of Public Policy Research’s (IPPR) Health and prosperity report estimates that the UK labour crunch will result in an £8 billion fall in economic output in 2022 alone.
By Jennifer Liu
