Mr Javid has shown the Cabinet the way

Finally, someone around the Cabinet table has shown that they get it. At last week’s infamous Cabinet Brexit meeting, Sajid Javid suggested to his fellow ministers that Britain should respond to any no-deal outcome by cutting taxes, building infrastructure and attracting top global talent. In fact, it would be wrong to characterise these policies as emergency measures: they’re what real Conservatives ought to do whenever possible as a matter of principle.

These sorts of supply side ideas show how a no-deal scenario could be turned into an opportunity for the radical reform of the economy that Britain has needed for years. The only question is, why does it take a Home Secretary to explain to the Governor of the Bank of England and the Chancellor of the Exchequer how to conduct economic policy?

The reality is that the UK mustn’t be passive in the face of any Brexit turbulence. We can and should respond in the way Mr Javid suggests, which means that any uber gloomy forecasts will inevitably turn out to be wrong. It is true that Philip Hammond has done nothing to counteract the uncertainty caused by poorly managed negotiations and the Government’s overall lack of leadership. Despite that, the economic hit thus far has been smaller than most establishment economists keep claiming. As the Institute for Economic Affairs argues, the impact has probably been around one per cent to date in terms of lost GDP. The IEA adds that investor uncertainty would be alleviated if the country’s direction were clearer and that Britain has yet to enjoy any of the benefits of Brexit – such as free trade deals, deregulation or Mr Javid’s economic package. Why can’t more people in the Government see all this? Just as importantly, why don’t they articulate it?

Mr Javid’s sensible intervention into the debate is a reminder that whenever there’s a downturn – contrary to the Bank’s models – governments generally stimulate or reform to lift the economy. If in the event of a no-deal outcome Mr Hammond really did intend to just sit on his hands, one would have to ask why he is Chancellor at all.

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