Wednesday 22 September 2021 6:10 am

Boris Johnson’s endurance on immigration will be put to the test by labour shortages

Steve Hawkes is Head of Strategic Media at BCW, former Business & Deputy Political Editor at The Sun

I always loved interviewing Stuart Rose. He was great company and if you stayed quiet long enough after asking a question, he’d give you a quote that made his press officers wince.

Unfortunately for the former M&S chief, his honesty caused his downfall in Westminster when – as a Remain supporter during the Referendum campaign – he was asked what effect ending free movement would have on wages.

They’d go up, he said.

With that he was promptly gagged, bound and packed off by furious Europhiles to never be seen again.

His reply looms large as business groups queue up to warn that the post-Brexit cap on low-skilled EU workers is causing acute labour shortages. There’s no one to pick fruit, pack meat, wait tables, wash linen or, of course, drive an HGV.

The CBI worries that Britain’s very economic recovery is at stake.

But, however much business screams and confused shoppers stare at blank shelves, Boris Johnson’s not for turning.  

There could be leeway to allow turkey producers to bring in labour under the Seasonal Agricultural Workers scheme, but for now it’s a firm no to broader exemptions and temporary visas.

The PM noted that the pressure to find staff meant there would finally be pressure on businesses to increase  wages. Re-appointed Priti Patel was told to get on with the job.

The PM’s allies insist Brexit is not the only culprit. There’s also the slight issue of a devastating pandemic that plunged the economy into a deep freeze. They’re not alone.

HGV drivers point out there have been predictions of a shortage for over a decade. Alan Manning, the former Migration Advisory Committee chair, opined that employers presenting their case in the national interest are often asking for something very much in their own.

Elsewhere, Professor Jonathan Portes, hardly a Boris fan, has called Britain’s new immigration regime one of the “most liberal in the world”.

But for a No10 operation with a habit of U-turns, the red line on immigration is a fascinating stand.

It’s also one that causes headaches for Labour as the PM does all he can to boost wages for voters. Sir Keir Starmer has already seen Boris Johnson adopt a Cornbynite zeal to spending.

The challenge for Downing Street will be staying the course during a painful labour market reset.

Take the cost of living. On official figures, inflation is at 3.2 per cent – the highest since 1997. Investec believes it could hit 4 per cent in the New Year with the resurgence in global demand and eye-watering wholesale gas costs.

As a mere pretender to the throne, Boris Johnson once attacked business for “mainlining immigration like a drug” for 25 years. But that kept prices down.  Now, there is already talk of bumper bonues for hauliers.

One chairman believe few are alive to the scale of the inflation challenge.  Britain has benefited from “imported deflation” for years, he said. Chinese goods were made on the back of cheap Chinese labour, and then companies benefited from the influx of Poles, Bulgarians and Romanians.

It’s no bad thing if Brits get these jobs, he says, but it won’t be without a cost.

Boris Johnson’s handling of it could determine the shape of the workforce for years to come.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.