British business leaders on Thursday criticised Prime Minister Boris Johnson for lacking a plan to deal with a labour shortage crisis after he called for them to pay higher wages.
Johnson said on Wednesday he was committed to moving Britain away from an economy reliant on cheap foreign labour, in a speech to members of his ruling Conservatives.
But he admitted that “difficult” times lay ahead as a result, as many pointed to an end to free movement of people and tighter immigration rules post-Brexit.
Supermarkets are already experiencing empty shelves, while panic buying over fears of a tanker driver shortage caused petrol pumps across Britain to run dry last week.
Supply chain problems are mounting because of a lack of lorry drivers, while other sectors from hospitality to retail have also complained of a shortfall of seasonal workers, many of whom previously came from the EU.
Businesses leaders said that Johnson was unfairly blaming them for low wages and that his strategy could lead to shortages and high inflation.
“The finger is being pointed at business as the bogeyman, but it’s much wider than that,” said Richard Walker, managing director of budget supermarket chain Iceland.
“We want to pay our people as much as possible but business is not an endless sponge that can keep absorbing costs in one go,” he told the Times newspaper.
“Next year we’ll have a wave of higher costs from higher energy bills, extra HGV (heavy goods vehicle) drivers, packaging costs.
“We can only weather so many cost increases at once.”
The Federation of Small Businesses said that it was now the opposition Labour party that had a pro-small business plan.
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“Looking at this party conference season, there was one party of the two that came out with a pro-small business policy,” the federation’s Craig Beaumont told Times Radio.
“The government should be looking at that and going: ‘Well, maybe we’ve taken this group a bit for granted’. So now, what is that small business offer’?”
Johnson has historically been in favour of low taxes and free markets, but his speech on Wednesday argued for tax hikes in order to deal with the coronavirus “meteorite” that hit public finances.
This has led to friction within Conservative circles, with others believing that low taxes are required to jump-start the recovery.
Free-market think-tank the Adam Smith Institute called the speech “bombastic but vacuous and economically illiterate”.
Conservative think-tank Bright Blue said the public would “tire” of Johnson’s rhetoric if shortages continued.
“The public will soon tire of Boris’s banter if the government does not get a grip of mounting crises: price rises, tax rises, fuel shortages, labour shortages,” Ryan Shorthouse, director of Bright Blue, told the Guardian.
“There was nothing new in this speech, no inspiring new vision or policy.”
AFP
