Brexit, economy and the UK workforce shortage

Some of us saw this coming, didn’t we? We’ve spent years, literally, talking about it. However, the topic of labour shortages and the impact (negative) of Brexit is coming back to us like a boomerang. It was absolutely fascinating to see an intervention from Lord Wolfson, the Boss of retailer Next, who said that Britain needs a different approach to migration. Wow, quite a “discovery”! And yet, there are still plenty of people who want us to “move on” and look ahead for a brighter and more prosperous future.

I am absolutely convinced that we have lost several years to come up with a good, sustainable and meaningful economical model to address some of these issues and the last few Conservative governments have failed to deliver on its “fantastic” Brexit promises.  A famous slogan “Take back control” is simply not working. It never meant to work! I understand – we might have voted against a greater political integration, however some people couldn’t foresee or didn’t want to admit that leaving the European Union, purely in business and financial terms, might cause a lot of damage to the UK economy.

A prominent Brexiteer, Lord Wolfson is currently struggling to recruit staff in his shops and retail units across the country, even though Britain’s unemployment is at record low levels. It wasn’t that difficult to predict, was it? However, Lord Wolfson is right; we need to find a different approach to economically productive migration and stop building “fortress Britain”. I would go further than that and I would argue that the government must stop its obsession with immigration and ill-driven ideology to reduce the number of people coming to Britain to do essential jobs in agriculture, social care sector or hospitality industry. Example? There are plenty! Only a few months ago, the government’s “creative approach” to workforce shortages meant a refusal of the aviation industry’s request to issue special immigration for foreign workers. Due to understaffing issues, many summer holidays had to be cancelled.

I agree that COVID, health pandemic, and now the war in Ukraine have significantly contributed to the way, in which we shaped our response to geo-political challenges at the national and international level. Having said that, I find it staggering that the government is (still) unable to face this stark economical reality, admit that it has made a mistake and it is still unwilling to find a compromise, which will strengthen, and not weaken, the UK economy.

Conclusion? I don’t have one, however one thing is certain: You really can’t make it up!

 

* Michal Siewniak is a Lib Dem activist and councillor for Handside ward, Welwyn Hatfield.

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14 Comments

  • Peter Martin 11th Nov '22 - 1:13pm

    “……… ill-driven ideology to reduce the number of people coming to Britain to do essential jobs in agriculture”

    Around the turn of the 20th century some 10% of the working population was engaged in agriculture. In earlier times the figure was even higher. The present day figure is 1%.

    If the jobs are essential, why have they been reduced as dramatically as they have been over the years? Looking from it from an economic POV we can say that the workers moved out of agriculture because conditions were better and the rates of pay were higher in other sectors of the economy. Employers were reluctant to match those terms and instead preferred to concentrate on less labour intensive methods of agriculture and improve productivity by investing capital in machinery to displace human labour.
    What has caused the reversal to a greater reliance on human labour? Again it is matter of economics. If we have a copious supply of cheap labour, it makes business sense to utilise it as much as possible. Is this a good thing. The remaining British workers in the industry are obviously reluctant to accept the same terms and conditions so they perhaps would say otherwise. They would point to the widespread non-observation of labour laws, including the non-enforcement of minimum pay laws under gangmaster systems of contractual labour.

    Would any of us be prepared to work under such conditions? Would we be happy to see our own children have to do so?

    https://en.wikipedia.org/wiki/Agriculture_in_the_United_Kingdom

  • …the topic of labour shortages and the impact (negative) of Brexit is coming back to us like a boomerang.

    Blaming “Brexit” for labour shortages is a non sequitur. As an independent country we can admit as many workers as we wish. This year immigration is at record levels…

    ‘Net migration could top 300,000 this year despite Tory manifesto pledge’ [21st. October 2022]:
    https://www.telegraph.co.uk/politics/2022/10/21/net-migration-could-top-300000-year-despite-tory-manifesto-pledge/

    It follows a record 1.12 million applications by foreign nationals to work, study, resettle or join family in the UK in the past year.

    The number of work visas issued to foreign nationals and their dependents has hit more than 330,000 in the year to June 2022, up nearly 80 per cent on the previous year.

  • …Lord Wolfson is currently struggling to recruit staff in his shops and retail units across the country, even though Britain’s unemployment is at record low levels.

    Because unemployment is at record low levels, potential staff have a choice…

    ‘With millions on benefits, we don’t need mass migration to boost GDP’ [10th. November 2022]:
    https://www.telegraph.co.uk/news/2022/11/10/millions-benefits-dont-need-mass-migration-boost-gdp/

    …Next is looking for staff in its Dearne Valley warehouse near Rotherham. […] And the starting salary? A princely £9.80 an hour, 30p above the minimum wage. Maybe more, if you’re lucky. But I’m not sure I’d bet on it.

    But it seems Next is having trouble filling such vacancies. Nearby, Asda is offering £10.10 an hour to pack online shopping at its store in town, or £12.64 to be a shop assistant. Why break your back on a 5am shift for far less cash? It’s a tough market. Might warehouses need to offer more competitive salaries? But Lord Wolfson, chief executive of Next, is asking a different question: where have the Poles gone? There’s only one answer, he says: import more workers. And quickly. […]

    Instead of doing the difficult job of hiring the long-term unemployed, British employers have been able to pick up the phone to an agency in Gdansk, which would then fly over whoever was needed for the warehouse shifts. Cheaper? Certainly. Did it make our clothes cost less? Probably. But good for the country? Absolutely not.

  • Jenny Barnes 11th Nov '22 - 3:40pm

    Lots of people coming to britain in small boats. Maybe they could do some of these jobs?

  • carlharrison 11th Nov '22 - 5:33pm

    It is ironic that at one time not too long ago we cut ourselves off from our biggest supply of local european workers because immigration was a major part of the brexit vote. I now hear from brexit voting associates that immigration is no longer a problem and that having lots of immigrants from India, Africa and the far east is absolutely no problem at all. For the moment.

  • @Peter Martin

    Substituting labour for capital requires access to capital, otherwise increasing wages will just result in a wage-price spiral. Labour-saving technology for fruits and vegetables (as opposed to cereals like wheat) is still very expensive, and farming is a low-margin business (so low that many farms are reliant on government subsidies), thanks to supermarket monopsony power. Cutting off migrants from the UK labour market isn’t a long-term solution, we need to invest in greater levels of automation, if only because real wage growth in eastern Europe is making seasonal agricultural work increasingly less attractive.

    In general, we shouldn’t be trying to get to full employment via some kind of labour market monetarism, by curbing who can join the labour force. After all, larger markets mean greater specialisation and division of labour and thus greater productivity. We need aggregate demand management.

  • Barry Lofty 12th Nov '22 - 9:41am

    When former pro Brexit businessmen start to concede that they have problems with one or more aspects of running a business outside a trading bloc that once helped to provide the extra workforce our country has always needed, it does not take a genius to determine that just maybe the country” threw the baby out with the bath water” when it voted in the referendum.

  • Having recently read an article on the issue from the Telegraph and the comments which followed it is clear that the response there, not directly voiced, is that benefit claiments are workshy and the Govt is failing to get them into employment. One even brought in the analogy of a whip into their response!
    I am all for claiments being given every support and opportunity to return to work but I am accutely aware that the vast majority of claiments are not able to work and should not be vilified because they are unable to do so.
    Care, the NHS and many industries are short of workers. Many need skilled and trained candidates and that shortfall is again a result of poor, inadequate or absent planning and guidance from Govt.
    Many other positions do not require qualification or any significant training but are just hard monotonous jobs which are not popular even in difficult times. Is that because benefits are too great. I don’t think so. Many are in rural communities with little or no public transport and those areas frequently have a very small population of unemployed people who could apply. This is a topic in which easy answers do not address the underlying problems and where getting on your bike and seeking work is not the solution.

  • Further to Peter Martin’s and William’s points, I know a dairy farmer slightly. His is a large farm employing several Polish workers so some time after Brexit I asked him how he would be affected.

    He told me that one of his Polish employees plans to stay and another would for the time being but not long term while the remaining two would be leaving in a few months. He seemed relaxed about the implications, saying he would have to increase automation, adopting technologies he knew about but hadn’t yet researched.

    So, as William says, there are capital cost implications. These didn’t seem to be a worry in his case but he’s very financially savvy and runs a large operation.

    As a matter of public policy increased automation with a fair split of its benefits is the way we should go but….

    1. The financial system prioritises property because it’s easier. Small businesses can find it hard to access capital unless they have property.
    2. Skilled jobs require quality training/retraining. In practice quality seems erratic and the emphasis more on getting numbers for a press release. Am I being too cynical here?
    3. While mass immigration (legal or otherwise) continues there is little economic pressure for either employers to invest or for the government to get its act together on training.

    So, we need a sea-change in approach across multiple policy areas, or we will continue to fall behind the competition.

  • Mick Taylor 12th Nov '22 - 8:13pm

    All very interesting, but it is all totally at odds with saving the environment, which requires an end to mass consumerism and a totally different approach to production. I am in favour of free movement, but the time should be coming when our society can move away from current modes towards a more leisurely society where goods are built to last by a properly trained local workforce and more money is invested into agriculture to make us less dependent on imports, which mean many food miles. Come on chaps and chapesses let’s rethink the whole issue.

  • Nonconformistradical 12th Nov '22 - 9:27pm

    I’m inclined to agree with Mick Taylor.

    Somehow we need to morph into a society in which people have affordable access to basic quality foods, shelter, warmth – and clothing – but not clothing to be thrown away after being worn a couple of times. And with much less emphasis on buying non-essentials.

    I perceive great pressure on people to buy (possibly expensive) consumer goods (the latest technology?) which they don’t really need, from business systems bent on making goods obsolete ASAP.

    I can imagine going out for leisure, meals etc. possibly costing more in future but people doing it less often to compensate.

  • It is funny how people talk glibly about supply-and-demand, until the scales tilt in ways they don’t expect or like…

    Having a high-level of employment and seemingly low-levels of spare workers when the econmony is basically shrinking is a good thing. As the high st. is discovering, just like the logistics sector with HGV drivers, the past is catching up with you. Don’t pay the real market rate and don’t provide reasonable terms and conditions then don’t expect people to want to work for you.

    Having spent a career in IT and IT start-ups, there never has been a time where I could not pay the above market average rates for people. So to me people like Simon Wolfson sound more like children having a tantrum discovering the world doesn’t revolve around them, than rationale adults.

  • Peter Hirst 13th Nov '22 - 4:43pm

    If our unemployment is at record low levels then perhaps many are in part time and insecure jobs. We need to make more use of our indigenous labour force. This needs to start with more investment in education, skills and apprenticeships. We also need to invest more in robots and other automated working. Ideally we need to be self sufficient in labour though there will always be movement accross countries for various reasons.

  • You can’t have a well functioning economy, growth, improving productivity and a decent tax base with a severe labour shortage as we have.

    There are large numbers coming to the UK but they never catch up from the 1.3m who returned to EU/EEA countries after the self harming vote. Also, bringing in larger numbers of predominantly low skilled people from developing or middle income countries as is happening will not replace predominantly higher skilled people who returned to Europe.

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