finance

Boris Johnson admits it will ‘take time’ to restructure UK economy


Boris Johnson on Wednesday admitted it would be difficult and “take time” to restructure the UK, as the prime minister doubled down on his pledge to create a “high-wage, high-skill, high-productivity” economy.

In his keynote speech to the Conservative party conference in Manchester, Johnson also defended his decision to raise national insurance contributions to increase funding of the NHS and social care.

Ministers have angered business this week by accusing it of wrongly relying on cheap foreign labour before the UK left the EU and Johnson introduced curbs on low-skilled immigration.

Companies have called on Johnson to relax the immigration controls amid labour shortages that have contributed to gaps on supermarket shelves and panic buying of petrol.

But Johnson insisted there would be no going back to the “old” economic model involving “uncontrolled immigration”.

He promised to take the UK towards a “high-wage, high-skill, high-productivity and, yes, low-tax economy”.

“It will take time, sometimes it will be difficult, but that was the change people voted for in 2016 and 2019,” said Johnson, referring to the 2016 EU referendum and the 2019 general election.

The prime minister insisted he had been right to raise taxes rather than increase public borrowing to increase funding for the NHS, as the health service seeks to tackle a backlog of hospital treatment accumulated during the Covid-19 pandemic.

Delegates show their appreciation for the PM following his speech
Delegates show their appreciation for the PM following his speech © Charlie Bibby/FT

He invoked the memory of former Conservative prime minister Margaret Thatcher to justify the rise in national insurance rates, saying she “would not have ignored the meteorite that has just crashed through the public finances”.

“She would have wagged her finger and said ‘More borrowing now is just higher interest rates, and even higher taxes later’,” he added.

The PM’s speech contained few policy announcements. He outlined a £3,000 premium to encourage maths and science teachers into the schools that need them most.

He also said a new east-west railway in the north of England, known as Northern Powerhouse Rail, would go ahead.

Johnson said his agenda to “level up” the UK by tackling regional inequalities would work “for the whole country” because it would take pressure off the south-east of England.

“We have one of the most unbalanced societies and lopsided economies of all the world’s rich countries,” he added.

Although Johnson exhorted business to raise wages to resolve labour market shortages, he also praised the private sector, including bankers, for developing the Oxford/AstraZeneca coronavirus vaccine.

“It was capitalism that ensured we had a vaccine in less than a year, and the answer is not to attack the wealth creators, it is to encourage them, because they are responsible for the aggregate increase in the country’s wealth that enables us to make this greater improvement and to level up everyone.”

Johnson also said the Conservatives would not give way in the culture wars, and would defend Britain’s history.

“This isn’t just a joke . . . we really are at risk of a cancel culture and so we Conservatives will defend our history and cultural inheritance,” he added.



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