Wednesday, December 1

“Economically Illiterate”: Prime Minister’s Conservative Conference Speech Gets Cold Reception | Business


Business leaders criticized Boris Johnson for lacking a coherent economic plan after he delivered a speech at a booster conference that barely mentioned the supply chain crisis.

The speech was condemned as “bombastic but empty and economically illiterate” by the Adam Smith Institute of the free market, while the conservative think tank Bright Blue issued a stern warning.

“The public will soon tire of Boris’s jokes if the government doesn’t control the growing crises: price hikes, tax hikes, fuel shortages, labor shortages. There was nothing new in this speech, no inspiring new vision or policy, ”said CEO Ryan Shorthouse.

The prime minister closed the Conservative conference in Manchester with an upbeat campaign-style speech interspersed with jokes and delivered from a specially created stage to a packed hall of party worshipers.

He did not mention supply shortages, gasoline lines or the 20-pound-a-week reduction in universal credit that went into effect Wednesday for more than 5 million families, the biggest benefit cut overnight.

Instead, the prime minister put forward an optimistic vision of a highly skilled, high-wage economy, vowing to “unleash” the “one spirit” of the British people.

He dismissed the current “strains and strains” as side effects of the economic recovery and said that companies could no longer “use immigration as an excuse not to invest in people, skills and the equipment, facilities, machinery they need. to do their job ”.

The speech was enthusiastically received by conservative activists, the former of whom had been queuing at the venue since approximately 6.30 a.m. But it came under heavy fire from business groups, trade unions and think tanks from across the political spectrum for failing to address the economic challenges facing the UK.

Tony Danker, CEO of the CBI, representing 190,000 UK companies or around a third of the private sector workforce, said Johnson had established a “compelling vision” for a high-wage, highly-skilled economy. But he warned: “The ambition for wages without action on investment and productivity is ultimately only a path to higher prices.” He added that the economy is in a “fragile moment” and urged the government to work more closely with companies.

Business leaders also responded to suggestions from the prime minister and his cabinet that they were unprepared for Brexit and were seeking uncontrolled immigration. Next boss Simon Wolfson, a prominent Brexiter, said before the speech that there was “real panic and discouragement” in the hospitality and nursing home sectors due to staff shortages.

The unions criticized the speech. Frances O’Grady, general secretary of the TUC, said: “If Boris Johnson were serious about leveling up Britain, he would not be cutting universal credit in the midst of a cost of living crisis. The prime minister is not in a position to lecture people about wages when he is withholding the wages of millions of key workers in the public sector. “The head of the travel industry union, Manuel Cortés, said that” it was no more that hot air “.

Liberal Democrat leader Ed Davey called the speech “the most out of touch screen for a prime minister in decades” and said the conference “may well be taking place in a parallel universe.”

Johnson praised private enterprise in his speech, stating that “it was capitalism that ensured we had a vaccine in less than a year” and promising to encourage “wealth creators.”

But some business groups have been dismayed that the government appears to blame companies for what Johnson called the “broken model” of low wages and low investment.

In the past, the prime minister has been notoriously dismissive of concerns from business groups, reportedly saying during tense Brexit negotiations in 2018: “Fuck business.”

Mike Cherry, president of the Federation of Small Business, said: “It is a relief to hear the Prime Minister speak positively about the business community. But it’s just as remarkable to hear the benefits of a low-tax economy when the government just approved an increase in national insurance contributions … which we estimate will cost at least 50,000 jobs. “

On the sidelines of the conference, some high-level conservatives expressed concern that the government did not predict the shortage of heavy vehicle drivers that led to the military being drafted to deliver gasoline, and cautioned that Johnson needs to work to reestablish relationships with companies.

One minister told The Guardian that voters until now had been stoic about fuel shortages, but unless the situation was brought under control in a week, they would lose their patience.

Other conservatives worry that increased national insurance contributions have ruined the conservatives’ reputation as part of low taxes.

Steve Baker, a prominent pro-Brexit MP, said: “The speech was classic Boris. We all enjoyed it. But in the end we have to feel that we are part of a conservative government that is lowering taxes and raising living standards.

Shevaun Haviland, Director General of the British Chambers of Commerce, said: “There are many things in the prime minister’s ambition for the future of the UK that should be rightly applauded, but what businesses urgently need are answers to the problems. facing here. and now. Companies are grappling with a cumulative crisis in business conditions as supply chains collapse, prices skyrocket, taxes rise, and labor shortages reach new heights. “

Deputy MP Tom Tugendhat said he was concerned about the risks of runaway inflation. “The increase in wages is fantastic, and the prime minister is absolutely right about that, but you also have to make sure you keep prices under control,” he said.

“I’ve spoken to senior bankers in the last few days, and they say that household inflation is working for the poorest members of our community by 10-15%, because energy costs are such a high proportion of their budget. “

Howard Davies, chairman of NatWest Group and former chairman of the Financial Services Authority, told the BBC’s Today show that paying people more without increasing productivity would only drive up inflation.

To achieve productivity gains, more investment is clearly needed, he said, but the UK has been investing less than any other European country apart from Greece in the past five years due to trade uncertainty around the new trade relationship with the EU. .


www.theguardian.com

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