Johnson blames low wages on ‘big business access to foreign labour pools’

Boris Johnson is calling for careful thinking on how to control immigration as he backs a wage boost for workers and insists the Government should “use Brexit to unite the country”.

With Prime Minister Theresa May’s EU withdrawal plans in turmoil, the former foreign secretary will use a keynote speech on Friday to urge the Cabinet to “focus on the issues that drove Brexit”.

Mr Johnson will say that big corporations have used “access to unlimited pools” of foreign workers as one way to keep wages down.

He is stressing the need to “think carefully” about how to control immigration and address the causes of the productivity gap.

But the ex-Cabinet minister will also say that controlling immigration alone will not be enough to give people a pay rise.

Speaking at JCB headquarters in Rochester, Staffordshire, Mr Johnson will say: “Yes, it (Brexit) was about democracy. But that vote was also triggered by a feeling that in some way the people of this country have been drifting too far apart and in areas where we need to come together.”

Turning towards the wage gap between workers and bosses, Mr Johnson will say: “We all know about boardroom pay and the huge expansion in the last 25 years of the gap between the remuneration of FTSE 100 CEOs and the average workers in their firms.

“We know one of the ways big corporations have held wages down is that they have had access to unlimited pools of labour from other countries.

JCB factory
JCB factory

“Now, I am a free market capitalist and a passionate believer in the benefits of migration, but there must be a balance and if an influx of labour is being used not only to prevent investment in capital equipment but also in the skills and prospects of young people, then we need to think carefully about how we control immigration.

“If we want the people of Britain to have a pay rise, as I do, then we can’t expect to do it by simply controlling immigration, we have to address all the causes of the productivity gap that has so massively expanded.

“I don’t mean the gap between the UK, France, Germany and Italy, though we are behind our main competitors, the most worrying gap is between London – the most productive part of the whole European economy – and other regions in the UK.

“If you look at the distribution of the Brexit vote, it is clear that people felt that gap in attainments and prospects and that they wanted something done.

“If we are to bring our nation together that means investing in great public services and safer streets, better hospitals, better transport links and better housing.”

Mr Johnson is also urging more devolved powers for the regions and a halt to income tax hikes.

He will say: “We must create the most favourable tax environment with no new taxes and no increases in rates and no one rich or poor to pay more than 50% of their income in tax – not because we want to create a tax haven for the rich but because that it is the way to stimulate the income we need to pay for this national programme of cohesion.

“We should take council tax, business rates stamp duty, land tax and the annual tax on enveloped dwellings, bundling them together giving them to local mayors and politicians to spend so that they have clear incentives to go for growth as Northern Powerhouse minister Jake Berry suggested last week.”