‘Economically illiterate’: PM’s Tory conference speech gets frosty reception

Next boss, thinktanks and unions criticise Boris Johnson, saying ‘shortages cannot be blustered away’

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Last modified on Wed 6 Oct 2021 10.27 EDT

Boris Johnson’s vision for the UK has had a frosty reception with business and union leaders, with one thinktank condemning the prime minister’s speech to Conservative conference as “economically illiterate”.

The Adam Smith Institute’s head of research, Matthew Lesh, also called Johnson’s address “bombastic but vacuous”, while the travel industry union chief, Manuel Cortes, said it was “nothing but hot air”.

Business leaders hit back at suggestions from the prime minister and his cabinet that they had been unprepared for Brexit and sought uncontrolled immigration, with the Next boss, Simon Wolfson, a prominent Brexiter, warning there was “real panic and despondency” in the hospitality and care home sectors because of staff shortages.

Reacting to Johnson’s keynote speech to Conservatives in Manchester on Wednesday, Lesh said: “Boris’s rhetoric was bombastic but vacuous and economically illiterate. This was an agenda for levelling down to a centrally-planned, high-tax, low-productivity economy. Boris is hamstringing the labour market, raising taxes on a fragile recovery and shying away from meaningful planning reform.

“Shortages and rising prices simply cannot be blustered away with rhetoric about migrants … There is no evidence that immigration lowers living standards for native workers. This dogwhistle shows this government doesn’t care about pursuing evidence-based policies.”

The free-market thinktank said Johnson “lacks policies to drive growth”, adding: “‘Levelling up’ so far consists of little more than listing regions and their local produce.”

Cortes, the general secretary of the Transport Salaried Staffs’ Association, said: “As ever, this political jester came up with nothing but hot air.

“We had slogans over specifics at a time when costs are rising, inflation is a real worry, universal credit is reduced for millions, there are widespread food and fuel shortages and a very real climate crisis.”

The TUC took aim at the government’s cut to universal credit, with the £20 a week uplift ending from Wednesday. Its general secretary, Frances O’Grady, said: “If Boris Johnson was serious about levelling up Britain, he wouldn’t be slashing universal credit in the middle of a cost of living crisis.”

In comments made before Johnson’s speech, which had been widely trailed, Lord Wolfson rejected the prime minister’s suggestion that he and other business leaders were advocating immigration without controls to ensure the flow of cheap overseas labour.

The Conservative peer told BBC Radio 4’s Today programme he envisaged that businesses pay migrant workers the same wages as they pay UK workers, plus a visa tax on top, for example 7% of wages.

Turning to the acute staff shortages in many sectors, Wolfson said: “When I talk to people who are in the restaurant industry, or in the hotel industry or the care home industry, there, there is real panic and despondency.”

The Next boss rejected the idea that British business needed a shock because it had got used to cheap labour. “That approach leads to queues at petrol stations and pigs being unnecessarily shot. I don’t think that is a particularly constructive approach,” he said.

Warehouse wages in the UK had gone up 60% over the past decade, he said, but Next was still struggling to get enough staff, especially at Christmas, because British people were unwilling to move for three months, be away from their families and miss Christmas.

Howard Davies, the chairman of NatWest Group and the former chair of the Financial Services Authority, told Today that paying people more without increasing productivity would just drive up inflation.

To achieve productivity gains, more investment was clearly needed, he said, but the UK had been investing less than any other European country, apart from Greece, in the past five years because of business uncertainty around the new trading relationship with the EU.

He said “businesses do invest in technology all the time” but “all of these things have lead times”, and called on the government to deal with the short-term problems “whether it’s pigs or HGV drivers or waiters in restaurants”.

Tony Danker, the director general of the business lobby group the CBI, was more positive about the speech, calling it “a compelling vision for our economy”.

However, he added: “The PM has only stated his ambition on wages. This needs to be backed up by action on skills, on investment and on productivity. Ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices.”

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