Corporate and government trade collapses in blame game

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Truck’s driver

Companies are to be blamed for failing to wean off a supply of European workers who were willing to endure the poor wages and working conditions resulting from years of industry underinvestment. If there are problems, it is because of the failures of companies and markets – not of the state.

The government is responsible for leaving the details of the Brexit deal unresolved until the very last minute and expecting companies to deal with these sudden changes alongside a pandemic – that has let companies struggle to stay afloat, let alone invest in new people and processes – is naive, inflexible and unnecessary.

These are the rough battle lines between business and government at this week’s Conservative Party conference. The Prime Minister told the BBC he does not want to revert to an economic model that voters rejected in 2016 and 2019.

“Some people who have written to me may be worried about this, but I’m not worried about it because, in fact, I think it will be good for their businesses to invest in people and invest in the capital”

One business leader said we shouldn’t forget when and where for his comments.

“Look, it’s party conference time, the government is under pressure and it knows it will see these problems and shortages for months to come, so it must have a story.

“The story is the recovery and the inevitable pains of a changing economy. But dismissing it as the business fault will not help everyone sit around a table and look for a practical transition plan. “

On Monday, pro-Brexit Next boss Lord Wolfson warned the government was ignoring the real issues of the labor shortage.

Writing in the Evening Standard newspaper in London, he said: “Whitehall should have no illusions: labor shortages are a real problem.

“The shortage of truck drivers is just one very visible example of a chronic problem affecting thousands of restaurants, nursing homes, small businesses, hospitals, fruit farms, warehouses and more, as well as all kinds of people. seasonal work. “

The story continues

He went on to suggest a system in which the industry would pay a 7% tax on the wages of foreign workers, which would incentivize companies to train British staff while still allowing the industry to determine when and where shortages were. serious enough to attract people. – rather than relying on the instinctive conjectures of government officials.

The Prime Minister rejected the plan on the BBC’s Today program as allowing potentially unlimited immigration, which “was not the way to go”.

The government and business agree on one thing. The so-called “super-deduction” announced in the budget allows companies to claw back more tax breaks than the amount they invest. This is, according to most companies, a very good move that will encourage them to invest in the kind of equipment, facilities and processes the Prime Minister is talking about.

However, its impact was offset by two things. A $ 6 billion increase in employer contributions to national insurance and, perhaps more importantly, insufficient time for new investments to generate productivity returns.

This is the number one complaint from businesses – you ask too soon and refusing to admit otherwise will make a very difficult winter worse.

Some are hoping that once the platform’s speeches are over, a more pragmatic approach may be called for – Steve Barclay of the Cabinet Office being identified as a key figure in bringing the two sides together.

This week, business and government seem just as suspicious and suspicious of each other as they have been in years.

Whatever the fault, a winter of potential food and fuel shortages, price hikes in stores, and billowing gas bills for consumers and businesses is everyone’s problem.

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