Brexit Bulletin: Back to the 1970s?

Days to Brexit: 16

(Bloomberg) --

What’s Happening? The rescue of Flybe, Britain’s biggest regional airline, is an early example of the kind of choice Boris Johnson will face after Brexit.

How can the government step in to help struggling companies? Traditionally, Conservatives would have let the market take its course: Monarch Airlines and Thomas Cook were both allowed to fail. But Prime Minister Johnson is anything but a traditionalist. He built his majority by winning seats in Labour’s working-class heartlands. Now he needs to show he can protect jobs in regions outside the prosperous southeast.

On Wednesday, the government said it would rescue  Flybe. Already, rival British Airways is complaining that the plan breaches European Union state aid rules, by which the U.K. is still bound until the end of the Brexit transition period in December. The government, for its part, denies the rescue breaks those terms.

Brexit will give Johnson a choice. Does he commit to a level competitive playing field with Europe to secure a wide-ranging trade deal? Or does he break away and give himself more freedom to intervene in business? It looks increasingly like he will pursue the latter course—in which case, he could well find himself having to help any number of companies reeling from his failure to reach a trade deal with the EU.

It would be ironic if one of the consequences of Brexit, a cause beloved of many free-marketeers, is greater government intervention. But as much as Johnson's views on the failings of the EU sound similar to those of his predecessor Margaret Thatcher, his approach to business is starting to look rather closer to that of the Tory leader for much of the 1960s and 70s: Edward Heath.

Beyond Brexit

• Climate change is killing Alpine skiing as we know it, and snow could all but disappear from lower-altitude resorts by the end of the century.
• Drones are being used to crack down on polluters in one of Europe’s smoggiest cities.
• Billionaire hotelier Barry Sternlicht has built a treehouse at the top of a 1960s office block in central London. Here’s our review.

Brexit in Brief

Carney is Correct | Johnson may not like to admit it, but Britain needs an interest rate cut, especially given that there’s still no clarity over what trade deal will be struck with Brussels, writes Bloomberg Opinion’s Ferdinando Giugliano.

Welsh Windfall | Wales will receive a “substantial sum of money” through a new fund to replace EU economic aid after Brexit, the new Welsh secretary has pledged.

Celebrate Good Times | The Greater London Authority has granted permission for Nigel Farage to hold a Brexit party in Westminster on January 31.

Big Ben Bong Latest | An MP spearheading the effort to get Big Ben to chime for Brexit says the £500,000 needed will be raised in days.

Want to keep up with Brexit?

You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday.

To contact the editor responsible for this story: Caitlin Morrison at cmorrison59@bloomberg.net, Chris KayGuy Collins

©2020 Bloomberg L.P.