What's the plan Boris?
Recession is coming and it is in large part an act of self-harm perpetrated by a government preoccupied with its own internal troubles and narrow political doctrines.
When somebody has gone to the trouble to deliver a speech or presentation at an industry event, I always feel an obligation to throw my hat in the ring when the floor is opened up for questions.
So, I found myself at the CBI North West Annual Dinner on Thursday night with the microphone being handed over. ‘What’ I asked, with examples cited below, ‘is the CBI’s and, more importantly, the Governments plan for solving the staffing crisis?’
What briefly followed was, as I will never get the opportunity to perform at Glastonbury or play at Wembley, my own much more minor adrenalin rush as the room broke out in unprompted applause.
The question had obviously struck a nerve for the audience.
Recession is coming and it is in large part an act of self-harm perpetrated by a government preoccupied with its own internal troubles and narrow political doctrines.
Examples given to me independently and unprompted in the last week on the scale of the staffing problem include
a prestigious hotel which has had 20% of its bedrooms off market since the beginning of the year because it cannot get the staff required to service the bedrooms or the additional customers that filling them would bring
A major London based visitor attraction which has reduced its opening hours by 40% because its reviews have been so poor due to the inability to properly service the demand from customers
A small Lake District town that currently has 103 vacancies across all sectors unfilled and with no prospect of the situation changing
The government loves to talk about the productivity gap but how are we supposed to drive efficiency when we cannot get the staple resource to run a business – the people.
We are told that it’s all hospitality’s fault
We need to pay higher wages – we are doing, many hotels are paying double digit increases or have implemented two pay reviews in the last year and payroll is now approaching 50% of net sales across the sector
We need to improve working conditions – many businesses are doing a massive amount to create a positive and fulfilling working environment but the vicious circle of staff shortages is heaping unsustainable pressure on existing employees
We need to invest in more efficient operations – what, after two years of Hokey Cokey opening and closing, balance sheets trashed because of the pandemic and corporation tax going up by 6% next year
We don’t need handouts, but we do need a business environment that allows growth to happen.
Why was VAT returned to 20% from the life saver rate of 5% as we came out of the pandemic? The government are collecting more in tax revenues than they forecasted yet they have heaped extra cost on business and the customer, stoking inflation, by returning to this punitive rate.
We are told that there are 5M people that are eligible for work but not in employment (and not included in the unemployment rate). There must be more incentives for the domestic workforce to move into gainful employment.
Grant Shapps talks about ‘not reaching for the immigration lever’ but doesn’t have the answer about where staff are supposed to come from. We must open our borders to EU labour again to service demand before it is too late and we are tipped into recession.
We are now forecasted 0% growth by the OECD next year, the lowest in the G20 apart from Russia which is only 4.1% worse. If the economy were a business, you would be acting now to deal with the problem.
The summer season is upon us. Business is watching this political class and waiting for an answer. What’s the plan Boris?