British prime minister Boris Johnson denied on Tuesday that Britain was in crisis due to a shortage of labour or that it was facing a 1970s-style inflationary spiral.
The United Kingdom's 25-year-old model of importing cheap labour has been up-ended by Brexit and Covid-19, sowing the seeds for a 1970s-style winter of discontent complete with worker shortages, spiralling wage demands and price rises.
Leaving the European Union, followed by the chaos of the biggest public health crisis in a century, has plunged the world's fifth-largest economy into a sudden attempt to kick its addiction to cheap imported labour.
Mr Johnson's Brexit experiment — unique among major economies — has further strained supply chains already creaking globally for everything from pork and poultry to medicines and milk.
Wages, and thus prices, will have to rise.
'Turning point'
The longer-term impact on growth, Mr Johnson's political fortunes and the UK's on-off relationship with the European Union is unclear.
"It's really a big turning point for the UK and an opportunity for us to go in a different direction," Mr Johnson (57) said when asked about the labour shortages.
"What I won't do is go back to the old failed model of low wages, low skills, supported by uncontrolled immigration."
He said Britons had voted for change in the 2016 Brexit referendum and again in 2019, when a landslide election win made Mr Johnson the most powerful Conservative prime minister since Margaret Thatcher.
Mr Johnson said that businesses had mainlined on low-wage imported labour for nearly 25 years and that they should now pay their workers more and invest more.
Asked by BBC radio if the UK was in crisis, Mr Johnson said: "No. I think that on the contrary, what you are seeing with the UK economy and indeed the global economy is very largely in the supply chains the stresses and strains you would expect from a giant waking up and that is what is happening."
Inflationary spiral
He added however that businesses need to spend more.
"What you saw in the last 20 years or more, almost 25 years, has been an approach whereby business of many kinds, was able to mainline low wage, low cost, immigration for a very long time," Mr Johnson said.
Asked if the UK was heading for a 1970s-style inflationary spiral, he said: "I don't think that the problem will present itself in that way and I think actually that this country's natural ability to sort out its logistics and supply chains is very strong."
Inflationary pressures will abate as supply improves to meet demand, Mr Johnson said.
Asked during an interview on LBC about the risks of inflation due to the UK government's push towards higher wages, he said: "What you are seeing is demand, growing demand sucking in gas from Russia or wherever, you are seeing demand for lorry drivers globally and that has an inflationary effect and as that clears, as supply meets demand then inflation abates."
127 drivers
Mr Johnson said that 127 drivers had applied for fuel trucker visas amid an acute shortage of drivers that has strained supply chains to breaking point.
He told BBC TV that the haulage industry had been asked to provide the details of drivers who were willing to come to Britain, and it had only given 127 names.
"What that shows is the global shortage," he said.
The Times newspaper reported that just 27 fuel tanker drivers had applied.
With fuel companies and supermarkets warning that a shortage of drivers was hitting deliveries, the UK government said late last month that it would temporarily reverse its immigration rules and give 5,000 visas for EU drivers to operate in Britain.
It said 300 of those could arrive immediately to drive oil tankers.
