Boris Johnson New Prime Minister : What Will Happen Next?

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November 5th 2024
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Boris Johnson New Prime Minister : What Will Happen Next?

We look at the financial effects of Boris Johnson taking the keys to Downing Street. Will the new prime minister really increase the higher rate tax bands?

Earlier today Boris Johnson took the leadership of the Conservative Party by nearly double the votes of rival Jeremy Hunt. It was however a closed election for Conservative members and represents the views of 160,000 individual members.

Now that Boris is taking the position of Prime Minister, as leader of the Conservative DUP coalition party, he has a number of important objectives to deliver on. Not least of which is the delivery of Brexit on Halloween (October 31st) this year.

In the build up to the leadership contest, Boris pledged a headline grabbing move to raise the higher rate threshold to £80,000. He did however state in his Telegraph column that the tax giveaway, which will likely benefit wealthy pensioners the most, would be funded by the continguency funds currently held in case of a no-deal Brexit.

Johnson then later went on to say that he would not have any issue going through with a no-deal Brexit. He changed his mind on this multiple times but has stated that October 31st is the final date, deal or no deal.

If Brexit is over and done with, successfully, there will likely be general election next spring. However, if the outcome is bad and Johnson struggles to get a deal, a snap election in late September is possible - with Johnson looking for a majority to push through a deal, or maybe even a possibility of a referendum.

If Labour take power in the event of a general election then a new Brexit referendum is the most likely course to follow - especially if Corbyn cannot get a workable deal.

An emergency no-deal Brexit budget would be the next step before any future tax policy is mentioned. The UK Budget is now in late October anyway so this should implement new legislation and policy decisions looking at softening the blows from a no-deal crash out of the European Union. But do the Conservatives have enough seats to implement anything?

Assuming Johnson makes it through to the final line, the tax cuts, and indeed any other major legislative changes, will likely not get enough of a majority to go through parliament without a party having a decent majority and a general election first.

It will be an interesting few months ahead.

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