MANCHESTER, England -- British Treasury chief Rishi Sunak promised Monday to deliver an economy based on “good work, better skills and higher wages,” as the governing Conservative Party tried to shrug off the U.K.'s economic turmoil as the growing pains of a thriving, self-reliant post-Brexit economy.
Sunak touted the U.K.’s low unemployment rate of under 5% as a sign it is putting pandemic disruptions behind it. He said now that Britain has left the European Union, it will embrace “the agility, flexibility and freedom provided by Brexit” to create a dynamic, high-tech economy.
For some, Sunak’s optimism in a speech to a conference of the ruling Conservatives struck a jarring note. It came as the combination of coronavirus and Brexit is sending shock waves through the British economy, with soldiers drafted in to ease fuel shortages and businesses scrambling to get enough staff.
Since the Tories' last conference two years ago, the party won a huge parliamentary majority under Prime Minister Boris Johnson. But Britain also has been hammered by a coronavirus pandemic that has left more than 136,000 people in the U.K. dead, Europe's second-highest death toll after Russia. The country also left the EU last year, ending its seamless economic integration with a trading bloc of almost half a billion people.
In recent weeks, a shortage of truck drivers, due to factors including pandemic disruption and a post-Brexit exodus of European workers, has snarled British supply chains, leaving some empty shelves in supermarkets, fast-food chains without chicken and gas pumps without fuel. Scores of soldiers began driving fuel tankers Monday after more than a week of gas shortages.
A major factor is post-Brexit immigration rules that mean EU citizens can no longer live and work visa-free in Britain, as they could when the U.K. was a member of the bloc. A well as trucking, staff shortages are hitting hotels, bars and restaurants, sectors that once relied heavily on European workers. Some hotels in the northern England city of Manchester, where thousands of Conservatives are meeting through Wednesday, have sent guests emails apologizing for being short-staffed.
Agriculture has also been hard hit, with abattoirs saying they are critically short of butchers. Angry farmers, some dressed as pigs, greeted Conservative delegates outside the conference center on Monday, demanding that the government “Save our bacon.”
“Pigs are backed up,” said Vicky Scott, a pig farmer from east Yorkshire in northern England. “There are farmers who are having to make decisions about which pigs to kill on the farm, which is barbaric. (They go) to landfill, a complete waste. It’s disgraceful.”
Like businesses across the economy, British farmers are urging the government to let in more EU workers to ease the shortages.
Johnson has done that for truckers and poultry farmers, offering 5,000 emergency visas to foreign hauliers and 5,500 visas to chicken and turkey workers. But the government has resisted easing restrictions on what it calls low-skilled workers, saying British people should be trained to take the jobs.
“The way forward for our country is not to just pull the big lever marked uncontrolled immigration,” Johnson said Sunday. He said Britain was ending “a broken model of the U.K. economy that relied on low wages and low skills and chronic low productivity.”
Some economists point out that more immigration does not automatically mean lower wages. And many Conservatives are worried about the impact on voters’ pocketbooks of a recently announced tax hike to fund health and social care, rising energy bills from a global surge in natural gas prices and a cut to welfare benefits for millions of people in Britain that kicks in this week.
Sunak, whose Treasury has spent billions in the last 18 months supporting workers and businesses as coronavirus lockdowns put the economy on ice, hinted more tax hikes might be coming, saying Britain needed to cut its ballooning debt.
“Yes, I want tax cuts," he said. "But in order to do that our public finances must be put back on a sustainable footing.”
To fuel growth, he promised programs to help young people get skilled jobs and more investment to make Britain a tech and science “superpower.”
Sunak's approach got a mixed reception.
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. And he is right that in the long run it is innovation and investment that will boost productivity and pay.”
But farmers like Scott say those long-term plans for the economy are little help to them now.
“I agree we should upskill our workforce in the U.K.,” she said. “But we should have done it months ago, years ago.”
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