Prime Minister Rishi Sunak came under pressure on Monday to ease economic tensions with the European Union and let more skilled workers into Britain to address the country’s economic problems.
Tony Danker, director-general of the Confederation of British Industry (CBI), urged Sunak to settle a dispute with the EU over trade between Great Britain and Northern Ireland in order to unlock more opportunities for trade and to ease immigration restrictions which are adding to the cost-of-living crisis.
“We’ve got an immigration system that’s far too nervous about bringing in the skills we need,” Danker said. He argued that the shortage of workers is adding to the “stagflation” pressures in Britain’s economy.
Danker is due to appear alongside Sunak at the CBI’s annual conference in Birmingham on Monday morning. The prime minister’s team is seeking to head off a fresh dispute over Britain’s approach to trade with the EU.
Danker said that the government should avoid opening up the broader debate over Brexit and focus on potential benefits from the existing deal, such as partnerships in science and mutual recognition of professional qualifications. Those initiatives are being held up by the dispute over Northern Ireland.
“Forget about the Swiss deal,” Danker said. “We just want the Boris Johnson Brexit deal to be implemented and that’s not happening right now because of the Northern Ireland Protocol.”
Switzerland is a member of the European Free Trade Association, which, thanks to about 120 bilateral accords, participates in the single market for most goods.
But it also has to accept free movement of labor, EU market regulations and makes annual payments to the bloc’s budget, all of which are red lines to hardline Brexiteers on the right of Sunak’s Conservative Party.
The push-back shows the bind Sunak is in as he and Jeremy Hunt seek to boost Britain’s economy, which the Chancellor of the Exchequer said last week is already in a recession that’s predicted to last through 2023.
Hunt last Thursday unveiled a £55 billion package of tax rises and spending cuts as he sought to restore the confidence of markets in the economy two months after former prime minister Liz Truss’s disastrous plan for £45 billion of unfunded tax cuts.
The government’s fiscal watchdog, the Office for Budget Responsibility, estimates Brexit will lower Britain’s trade intensity by 15 percent over the longer term.
There are signs Sunak’s administration is trying to repair the fractious relationship with the EU. The European Commission told members last week that relations with London have improved under Sunak, though that hasn’t yet translated into concrete changes in British positions on Northern Ireland.
“Having unfettered trade with our neighbors and countries all over the world is very beneficial to growth,” Hunt said last Friday, adding that in the years ahead, the Britain will be “able to remove the vast majority of the trade barriers that exist between us and the EU” while remaining outside the Single Market.