It is hard to count the ways in which Brexit has transformed the Conservative Party, but its attitude to business is certainly one of them.
For decades the Tories have boasted of being “the party of business”. At the Conservative conference in Manchester, lobbyists and their clients are hosting and attending lavish receptions, where champagne is poured late into the night. Business is booming. And business events – such as ticketed lunches and dinners for donors – are still a vital source of funding for Boris Johnson’s party.
But on the multiple shortages affecting the UK, the Prime Minister and his team have decided to part company from corporate Britain. The fault line, once again, dates back to Brexit.
In 2018, as foreign secretary, Johnson was allegedly overheard responding to the concerns of companies at the disruption Brexit will cause with the words: “fuck business”.
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There was a truce for a while, as Johnson secured a Brexit deal and a new trading agreement with the EU, and then signed off hundreds of billions of pounds in state support for the private sector during the pandemic.
But the “fuck business” attitude of the Brexit wars is back, along with the debate over the UK’s immigration regime. It is a stance that is shaping the government’s response to the shortages of workers in sectors including hospitality, manufacturing and logistics. Industry leaders want more workers but Johnson says he is refashioning the economy to wean it off an addiction to cheap foreign labour.
Over the last 20 years, businesses of many kinds were able to “mainline low-wage, low-cost immigration”, Johnson told BBC Radio 4’s Today programme on 5 October. He wants the private sector to sort out the HGV driver shortages on its own, and holds industry responsible for the weaknesses that the current crisis has exposed.
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“This country is at a turning point,” Johnson said. “If you look at the productivity of the UK, this country has undershot its competitors for two decades or more. And that is because we have had a low-wage, low-cost approach where business does not invest in skills, does not invest in capital or facilities.”
The Conservative prime minister seems to be saying businesses should use their profits not to make shareholders richer, but instead to invest in paying better wages and upgrading their operations. “If you look at the potential of business to make investments in their capital, in equipment, if you look at their balance sheets, they have the ability to do this. There are huge sums that business could invest.”
In the road haulage industry, “they haven’t been putting money into truck stops, into conditions, into pay – so there’s no supply of young people in this country who, frankly, at the moment are thinking of becoming truck drivers.”
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It is one thing for Johnson to argue that companies should pay British truckers more, but the same logic might be a harder sell when it comes to lawyers and accountants. According to a report in the Financial Times, there are growing “white collar” labour shortages, with some City firms turning away work because they don’t have enough staff. Data compiled by KPMG and the Recruitment & Employment Confederation showed new appointments hit a record high in June, along with sharp increases in starting salaries driven by a drop in available candidates.
Politically, the Conservatives are calculating that they can pick a fight with corporate Britain because voters are on their side – those who backed Brexit in 2016 and Johnson in 2019 don’t want a return to “open door” migration from the EU and don’t like listening to the moneyed elites. The other reason Johnson may feel he has the room to be rude to businesses is that they have nowhere else to go for political support in the UK.
Labour’s Ed Miliband, the shadow business secretary, recently alarmed his colleagues by making the case for wholesale nationalisation of the biggest energy firms.
But there is a bigger risk to post-Brexit Britain from a Tory party that’s hostile to businesses’ needs. Big, profitable companies won’t simply look to other politicians for support, some of them might just leave the country instead.
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