Rishi Sunak, British Treasury chief, promised Monday that he would deliver an economy built on “good work and better skills and higher wages.” The governing Conservative Party attempted to dismiss the U.K.’s economic turmoil as the growing pains associated with a self-reliant, thriving economy post-Brexit.
Sunak cited the U.K.’s below 5% unemployment rate as an indicator that it is moving past pandemic disruptions. Sunak stated that now that Britain has left Europe, the country will embrace “the agility and flexibility provided by Brexit” in order to build a high-tech, dynamic economy.
Sunak’s optimistic speech at a Conservative conference struck a disturbing note for some. This came at a time when the combination coronavirus/Brexit is sending shock waves through Britain’s economy. Soldiers were drafted to help with fuel shortages, and businesses are scrambling for staff.
Two years ago, the Tories won a large parliamentary majority in the UK under Prime Minister Boris Johnson. Britain has also been hit by the coronavirus pandemic, which has killed more than 136,000 people. This is Europe’s second-highest death rate after Russia. Last year, the country left the EU and ended its seamless integration with a trade bloc that included almost half a million people.
A shortage of truck drivers has hit Britain in recent weeks due to pandemic disruptions and a post-Brexit exodus. This has left some shelves empty in British supermarkets, fast-food restaurants without chicken, and fuel pumps without gas. After more than a week without gas, hundreds of soldiers started driving fuel tankers Monday.
One major reason is the post-Brexit immigration rules, which mean EU citizens cannot no longer live or work visa-free within Britain. This was possible when the U.K. belonged to the bloc. Trucking is not the only problem. Staff shortages are also affecting bars, restaurants, and hotels that used to heavily rely on European workers. Manchester, a northern England city, has seen thousands of Conservatives meet through Wednesday. Some hotels have sent emails to their guests apologizing for not having enough staff.
Abattoirs have also reported a shortage of butchers, which has had a devastating effect on agriculture. On Monday, angry farmers dressed up as pigs welcomed Conservative delegates to the conference center, demanding that the government “Save Our Bacon.”
Vicky Scott, a pig farmer in east Yorkshire, said that “pigs are backed up.” “There are farmers that are being forced to decide which pigs they want to kill on their farm. This is unacceptable. They are a total waste. It is disgraceful.
British farmers, like other businesses in the economy, are asking the government for more EU workers to alleviate the shortages.
Johnson offered 5,000 visas for foreign truckers and 5500 visas for poultry farmers. The government has refused to ease restrictions on low-skilled workers and said that British citizens should be trained for the job.
Johnson stated Sunday that “The only way to move forward for our country” is not to pull the big lever of uncontrolled immigration. Johnson said Britain was ending the “broken model of the U.K.’s economy, which relied on low wages, low skills, and chronically low productivity.”
Economists argue that increasing immigration does not necessarily mean lower wages. Many Conservatives are concerned about the financial impact of a tax increase to fund social care and health, rising energy costs from a global surge of natural gas prices, and a reduction in welfare benefits for millions of British citizens that kicks into effect this week.
Sunak, whose Treasury spent billions over the past 18 months supporting workers as coronavirus lockdowns put an economy on the ice, suggested that more tax hikes could be coming. He said Britain must reduce its debt.
He said, “Yes, I want tax reductions.” “But to achieve that, our public finances need to be restored on a sustainable basis.”
He promised to boost growth by implementing programs that would help young people find skilled jobs, and to increase investment in Britain to become a “superpower” in science and technology.
Sunak’s approach received mixed reactions.
David Willetts, president of economic think-tank the Resolution Foundation, said he “sounded more West Coast than Westminster, by putting productivity-enhancing tech at the heart of his post-Brexit vision for Britain. He is correct that innovation and investment will ultimately boost productivity and pay.
Scott, a farmer, says that long-term economic plans are not of much help right now.
She said, “I agree that we should upskill the U.K. workforce.” “But it should have been done months ago, not years ago.”