London Daily

Focus on the big picture.
Saturday, May 31, 2025

‘Economically illiterate’: PM’s Tory conference speech gets frosty reception

Next boss, thinktanks and unions criticise Boris Johnson, saying ‘shortages cannot be blustered away’
Business leaders rounded on Boris Johnson for lacking a coherent economic plan after he delivered a boosterish conference speech that made barely a mention of the supply chain crisis.

The address was condemned as “bombastic but vacuous and economically illiterate” by the free market Adam Smith Institute, while the Conservative thinktank Bright Blue issued a stark warning.

“The public will soon tire of Boris’s banter if the government does not get a grip of mounting crises: price rises, tax rises, fuel shortages, labour shortages. There was nothing new in this speech, no inspiring new vision or policy,” its chief executive, Ryan Shorthouse, said.

The prime minister closed the Conservative conference in Manchester with an upbeat, campaign-style address interspersed with jokes and delivered from a specially created stage to a packed hall of the party faithful.

He failed to mention supply shortages, petrol queues or the £20-a-week reduction in universal credit that came into force on Wednesday for more than 5 million families – the biggest overnight cut in benefits ever.

Instead, the prime minister set out an optimistic vision of a high-wage, high-skilled economy, promising to “unleash” the “unique spirit” of the British people.

He dismissed current “stresses and strains” as side-effects of the economic recovery and said firms could no longer “use immigration as an excuse for failure to invest in people, in skills and in the equipment, the facilities, the machinery they need to do their jobs”.

The speech was enthusiastically received by Conservative activists, the first of whom had queued at the venue since about 6.30am. But it was robustly attacked by business groups, trade unions and thinktanks across the political spectrum as failing to tackle the economic challenges facing the UK.

Tony Danker, director-general of the CBI, which represents 190,000 UK businesses or about a third of the private-sector workforce, said Johnson had set out a “compelling vision” of a high-wage, high-skill economy. But he warned: “Ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices.” He added that the economy is at a “fragile moment” and urged the government to work more closely with business.

Business leaders also hit back at suggestions from the prime minister and his cabinet that they had been unprepared for Brexit and sought uncontrolled immigration. The Next boss, Simon Wolfson, a prominent Brexiter, said before the speech that there was “real panic and despondency” in the hospitality and care-home sectors because of staff shortages.

Unions criticised the speech. Frances O’Grady, the secretary general of the TUC, said: “If Boris Johnson was serious about levelling up Britain, he wouldn’t be slashing universal credit in the middle of a cost-of-living crisis. The PM is in no position to lecture people on wages when he is holding down the pay of millions of key workers in the public sector.” The travel industry union chief, Manuel Cortes, said it was “nothing but hot air”.

The Liberal Democrat leader, Ed Davey, called the speech “the most out of touch display by a prime minister in decades” and said the conference “may as well be happening in a parallel universe”.

Johnson praised private enterprise in his speech, claiming “it was capitalism that ensured that we had a vaccine in less than a year” and promising to encourage the “wealth creators”.

But some business groups have been dismayed by the government appearing to blame companies for what Johnson called the “broken model” of low wages and low investment.

The prime minister has in the past been notoriously dismissive of the concerns of business groups, reportedly saying during the fraught Brexit negotiations in 2018: “Fuck business.”

Mike Cherry, the chair of the Federation of Small Businesses, said: “It’s a relief to hear the prime minister speak positively about the business community. But it’s equally remarkable to hear the benefits of a low-tax economy vaunted when the government has just signed off a hike in national insurance contributions … which we estimate will cost at least 50,000 jobs.”

On the sidelines of the conference, some senior Conservatives expressed concern about the government’s failure to foresee the HGV driver shortage that led to the army being drafted in to deliver petrol, and warned that Johnson needs to work to restore relations with business.

One minister told the Guardian that voters had so far been stoical about fuel shortages but unless the situation was brought under control within a week they would lose patience.

Other Tories are concerned that the rise in national insurance contributions has trashed the Conservatives’ reputation as a low-tax party.

Steve Baker, a prominent pro-Brexit MP, said: “The speech was vintage Boris. We all enjoyed it. But in the end we need to feel like we are part of a Conservative government that is lowering taxes and raising the standard of living.”

Shevaun Haviland, director general of the British Chambers of Commerce, said: “There is much in the prime minister’s ambition for the future of the UK which should be rightly applauded but what businesses urgently need are answers to the problems they are facing in the here and now. Firms are dealing with a cumulative crisis in business conditions as supply chains crumple, prices soar, taxes rise and labour shortages hit new heights.”

The backbench MP Tom Tugendhat said he was concerned about the risks of runaway inflation. “Rising wages are fantastic, and the prime minister is absolutely right about that, but you’ve got to make sure you keep prices under control too,” he said.

“I’ve spoken to very senior high street bankers in recent days, and they say that inflation for a household is running for the poorer members of our community at 10-15%, because energy costs are such a high proportion of their budget.”

Howard Davies, the chairman of NatWest Group and the former chair of the Financial Services Authority, told the BBC’s Today programme that paying people more without increasing productivity would just drive up inflation.

To achieve productivity gains, more investment was clearly needed, he said, but the UK had been investing less than any other European country apart from Greece in the past five years because of business uncertainty around the new trading relationship with the EU.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×