Boris’s economic bluster
“Boris,” as he is widely known, was rewarded with ecstatic applause from his supporters and ministerial colleagues, but the media and business response was largely negative about lack of serious answers to British economic woes ranging from petrol shortages, rising fuel and food prices, to UK industrial productivity compared to its former European partners.
He barely mentioned the empty shelves in supermarkets or the debilitating lack of immigrant truck drivers which is directly linked to the country’s departure from the EU in line with his slogan “Get Brexit Done” – the controversial achievement with which he will be forever associated and directly blamed for by Remainers.
Instead, the prime minister set out an optimistic vision of a high-wage, high-skilled economy, promising to “unleash” the “unique spirit” of the British people. He dismissed current “stresses and strains” as side-effects of the economic recovery and said firms could no longer “use immigration as an excuse for failure to invest in people, in skills and in the equipment, the facilities, the machinery they need to do their jobs”.
For the last 18 months he has been widely criticized for his failure to respond effectively to the Covid pandemic by not attending emergency meetings to tackle the escalating crisis which saw the UK record one of the highest death-rates in Europe and the wider world and avoiding lockdowns. True, Boris has benefitted from the highly successful national vaccine rollout programme, but Covid is far from over.
“His speech, shamefully, was another attempt to rig the record on Covid, despite clear evidence the government failed to take timely action to prevent this country’s needlessly high death toll,” was the editorial judgment of the left-wing Guardian newspaper. And a right-wing think-tank described Boris’s “rhetoric as bombastic but vacuous and economically illiterate.”
Johnson’s broader social-economic ambitions are summarized in the concept of what he calls “levelling up”- characterized as building new roads, bridges, improved rail services and renovating high streets. That concept is designed to attract supporters of the opposition Labour Party who generally live in poorer parts of the UK. In the 2019 election the Tories succeeded in breaking what is known as the “red wall” – areas that have traditionally been held by Labour.
That will inevitably take longer than the three years remaining until 2024, when the prime minister will have to seek a new mandate. Yet his biggest problem is that such improvements – for which crucially there are no defined targets - risk being eclipsed by a rising cost-of-living crisis and inflation that will hit voters in the poorest regions the hardest, making his promise ring even more hollow.
Last week 4.4 million households with 5.1 million adults and 3.5million children saw their incomes fall by £1000 overnight – losing 10% of their income as the government slashes the basic rate of welfare benefits to its lowest level for over 30 years. Johnson made a virtue of raising taxes to fix the Covid-related backlogs in the National Health Service but he failed to acknowledge that it would been fairer to target assets rather than income. An additional element is the government’s decision to end pandemic financial support for businesses.
Unions also criticised his Tory conference speech. “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,” said Frances O’Grady, the secretary general of the Trade Union Congress. “The PM is in no position to lecture people on wages when he is holding down the pay of millions of key workers in the public sector.”
To achieve productivity gains, more investment is clearly needed, but the UK has 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.
Another significant factor in the escalating UK economic crisis is the rising cost of global gas supplies to consumers and industries in the weeks before the November COP26 Climate Summit in Glasgow – which Johnson is clearly hoping to use to promote the UK’s commitment to tackling the looming disaster of global warming. Business leaders are deeply unhappy that the government has done so little protect them and their customers.
Responding to the prime minister’s conference gig, the chief of the Conservative thinktank Bright Blue issued a stark warning: “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. There was nothing new in this speech, no inspiring new vision or policy.” Let’s hope that Johnson finally begins to pay attention to his many critics – rather than just enjoying flattering audiences laughing at his own jokes!
by: IAN BLACK