Shrugging off crises, UK PM Johnson delights party, annoys business

October 6, 2021

By Elizabeth Piper and Kylie MacLellan

MANCHESTER, England (Reuters) -Prime Minister Boris Johnson vowed to radically re-shape Britain on Wednesday, exhorting his Conservative Party faithful to help government press on with tackling regional inequality by ending “long term structural weaknesses” in the economy.

In a speech to end his party’s annual conference, Johnson, known for his overarching optimism in all things, listed what he called the Conservatives’ successes and shrugged off fuel, food and industry crises as “merely a function of economic revival”.

It was a speech, absent of major policy announcements, very much directed at his party, trying to rally the troops and ease concerns among some who fear he is leading the Conservatives away from their long-standing low-tax, small state ideology.

He invoked former prime minister Margaret Thatcher, trumpeted the coronavirus vaccine roll out and took aim at what he called the “tired old” main opposition Labour Party, revving up a hall who cheered and applauded throughout the speech.

But he will not have impressed many restaurant owners, farmers and retailers, who are struggling with staffing gaps and have called for the government to allow them to attract foreign workers so they can avoid shortages and closures.

“The answer to the present stresses and strains, which are mainly a function of growth and economic revival, is not to reach for that same old lever of uncontrolled immigration to keep wages low,” he told a packed conference hall in the northern English city of Manchester.

“The answer is to control immigration to allow people of talent to come to this country, but not to use immigration as an excuse for failure to invest in people in skills, and in the equipment, the facilities and machinery … they need to do their jobs.”

“To deliver that change we will get on with our job of uniting and levelling up across the UK – the greatest project that any government can embark on.”

HIGHER PRICES

Answering critics who have called for more measures to bring in foreign workers to plug gaps in the haulage and agriculture industries, Johnson again called on businesses to do more to lift wages and attract more workers.

Many were less than impressed.

Tony Danker, director-general of the CBI business lobby group, said the ambition for higher wages “without action on investment and productivity is ultimately just a pathway for higher prices”.

“It’s a fragile moment for our economy. So, let’s work in partnership to overcome the short-term challenges and fulfil our long-term potential.”

The chief executive of one company in the top 150 of Britain’s FTSE listed companies said Britain was going through a “painful readjustment” post-Brexit which had been delayed by the COVID pandemic: “The government’s relationship or lack of relationship with business is a symptom of this.”

Even some Conservative lawmakers expressed concern over the possibility of higher prices, particularly at a time when the government has withdrawn a top-up to a state benefit for low-income households and increased some taxes which could hurt lower-paid workers most.

“Rising wages are great unless prices rise faster. Inflation matters — it’s about what we can afford and how families make ends meet in a tough month,” Tom Tugendhat said on Twitter.

Despite some disquiet, Johnson’s team was happy with the reception to the speech and his quips — including playing with his slogan of “build back better” to praise the resumption of beef exports to the United States by saying build back burger.

The next test is whether the prime minister and his ministers can deliver on their pledges to “level up” and weather what many economists say could be prolonged period of disruption.

“When I stood on the steps of Downing Street I promised to fix this crisis, and after decades of drift and dither,” he said.

“This can-do government, this government that got Brexit done, that’s getting the COVID vaccine rollout done, is going to get social care done and we are going to deal with the biggest underlying issues of our economy and society.”

(Reporting by Elizabeth Piper and Kylie MacLellan: Additional reporting by Kate Holton and William James; Editing by Giles Elgood and Alison Williams)

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