boris johnson

Analysis: Boris Johnson Still Wants A High Wage Economy … But Not Yet

today20 June 2022 1

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At the Conservative Party conference last October, Boris Johnson was unequivocal.

“We are embarking now on a change of direction that has been long overdue in the UK economy – we are not going back to the same old broken model with low wages, low growth, low skills and low productivity – all of it enabled and assisted by uncontrolled immigration,” he said.

The prime minister said the UK was instead heading “towards a high wage, high skill, high productivity and – yes – thereby low tax economy.”

How times change.

This morning, Downing Street urged private sector employers to “take heed” of the soaring rate of inflation when it comes to giving their staff pay rises .

Johnson’s spokesman said: “There is a global challenge we are seeing, particularly around inflation at the moment, and we need as a country to avoid doing anything that would stoke inflationary pressures further.”

Asked if pay is one of those factors, he said: “Certainly pay rises could be one of those areas that could be of detriment.”

His comments came after Simon Clarke, the chief secretary to the Treasury, used his broadcast media round this morning to warn public sector employees to expect a real terms pay cut.

“In the current landscape of inflation at 9% bordering 10%, it is not a sustainable expectation that inflation can be matched in payoff,” Clarke said.

“We cannot get into a world where we are chasing inflation expectations in that way because that is the surest way I can think of to bake in a repeat of the 1970s, which this government is determined to prevent.”

Asked when we might see wage rises match inflation, the PM’s spokesman said: “I wouldn’t put a time frame on it.”

So it seems Boris Johnson does indeed still want a high wage economy – but not yet.

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