AS I SEE IT: TERRY MURDEN says the Chancellor needs to ease the Brexit rules on overseas workers
When asked about their biggest concerns, businesses are increasingly putting labour shortages near the top of the list. While energy costs and other rising bills are the main cause of sleepless nights, company managers are struggling from an ability to hire people and are demanding action. Could it force the Chancellor and Prime Minister to do the seemingly unthinkable and breach the Brexit code by announcing a relaxation of the immigration rules?
Jeremy Hunt, who will deliver his Autumn Statement on Thursday, has been dropping a few hints on the topic. In a television interview on Sunday he spoke of the 600,000 who have left the labour market during the pandemic “creating constraints for businesses who can’t employ the people they want to”. He added that this was “something I will be talking about on Thursday”.
What does he have in mind?
Well, businesses and lobby groups have been calling for an easing of the rules that prevent workers coming into the UK. Hospitality, agriculture and the care services are among the sectors most obviously hindered by the Brexit prohibition, but it is affecting all sectors.
Jane Gratton, head of policy at the British Chambers of Commerce, looked through the latest data on unemployment and wage rates to focus on what she said was the record number of job vacancies. She believes this alone will hinder the recovery as companies winning orders find they cannot get people with the required skills to do the work.
The number of unfilled posts between August and October was 1,225,000, and while this represents a gradual fall over the year, it remains 429,000 (54%) above the January to March 2020 pre-coronavirus (COVID-19) level.
While the SNP fires political ammunition at Brexit, Mr Hunt is reluctant to pin the blame entirely on the UK’s departure from the EU and says there are a number of factors at work that need to be addressed. This is a partial truth.
Mr Hunt will focus on a contradiction between rising unemployment and a shortage of workers which clearly indicates that the available labour is just not suited to the jobs on offer. Or not willing to take them. The Office for National Statistics says young workers are joining the older group simply leaving the labour market altogether.
As we all know, jobs in pubs, restaurants, care homes and strawberry fields have been among the more difficult to fill because we have relied on overseas workers who are no longer on tap.
But there are other issues to address beyond having an indigenous workforce not prepared to undertake jobs in the services and labouring sectors. There are clear skills mismatches and continuing obstacles to flexibility which is now higher on the agenda for many workers.
It would be no surprise if Mr Hunt introduces a package of measures to remove these barriers to work, offering rapid re-training opportunities and better access to childcare and public transport, as highlighted by Jane Gratton.
His most likely tools will be tax relief, grants and loans, though he could go further and sacrifice a Brexit pledge on immigration, or at least finesse the rules that will allow Downing Street to save face with the hardliners while showing business that he really does want to do “something about” the labour issue.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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