The impact of staff shortages on the UK economy

I like my Sunday routine. I am not a coffee drinker, however I enjoy my morning walk to Welwyn Garden City Town Centre and getting my favourite vanilla latte.

In the last couple of weeks, I have noticed that one of my local coffee shops is opening later than usual. I thought that it might be a good idea to ask what causes this late opening. I was told that unfortunately; they are short staffed. This particular outlet recruited two new individuals, however one of them, I was told, resigned very quickly.

I am sure that no one will be surprised if I say that the British economy has been reliant on the “foreign workforce” for quite a long time. Various data suggests that:

  • The hospitality industry employed three million people before the pandemic and 30% of its workforce came from overseas
  • The construction sector, particularly in London (28%), has relied upon EU nationals
  • According to latest figures, there were 112,000 vacancies in the care sector
  • The meat processing industry employs, which is staffed by 2/3 by non-UK workers, at the end of August, was missing 14,000 people out of 95,000 employed in the sector

There are plenty of reasons why this is happening: changes to the immigration rules, changes to our “working patterns”, the health pandemic or UK’s exit from the European Union are only a few.

What should happen next so that we can mitigate future staff shortages in our essential industries? Better pay? Working conditions? “Obsession” with the immigration rules need to change?

Whatever it is, I think that unless something changes dramatically, we might all have to get used to these changes of our “daily economic circumstances”? Not getting latte in the morning is not the end of the world, however not having enough people to staff our care homes, nurses to look after our patients, food pickers to ensure that our shelves are not empty are most definitely worrying signs. Is this the “global Britain” we were all promised a few years ago? I don’t think so.

* Michal Siewniak is a Lib Dem activist and former councillor

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22 Comments

  • John Barrett 4th Oct '21 - 10:18am

    The shortage of lorry drivers, construction workers, carers, farm workers and people working in the hospitality industry, is something that has been an issue for many years and although made worse by Brexit and the pandemic, it does not take a genius to see that while our education system is very much geared to increasing the number of people gaining access to university, not one of those jobs mentioned above require a degree.

    They all require skills, or apprenticeships with college study and dedication, but with growing concern from many about the prospects for graduates and growing shortages in a number of areas, it must be time to look again at what young and older people are studying, or being trained for, and to increase the amount of pay and respect for those without degrees but who do some of the most important and essential jobs in our society.

  • Barry Lofty 4th Oct '21 - 10:52am

    Much of the present shortage of essential workers could and should have been foreseen by any government with the intelligence the country would expect of leaders with any degree of competence but John Barrett is also correct in that there has to be change of direction and respect for people who do the jobs that are so important to us all and that also includes a decent wage.

  • Peter Martin 4th Oct '21 - 11:31am

    In principle I’m all in favour of the idea that we should be able to move around. I’ve done a fair bit of that myself and don’t want to restrict the rights of others. However, a problem arises when the movements of people are highly asymmetrical as they tend to be within the EU. It doesn’t do the peripheral regions any good to become depopulated and it doesn’t do the less well paid workers in the richer areas to have their bargaining power reduced and see their wages stagnate, and even drop after inflation, over a period of years.

    Social tensions arise and it can lead to such events as, er, Brexit!

    If the EU had been properly organised when we were members, we wouldn’t have seen workers wanting to move from Malaga to Manchester. Or Bucharest to Birmingham. We might, though, have expected it to be the other way around!

    https://globalriskinsights.com/2019/10/population-decline-in-central-and-eastern-europe/

  • David Evans 4th Oct '21 - 12:11pm

    It is perfectly clear that the rush to manufacture so many more graduates has been a disaster on so many levels over the last 20+ years. Promoted by Tony Blair at the start of his premiership, it rapidly led to a massive imbalances in the country: social, economic and cultural, which we are nowhere nearer resolving now than we were then.

    However, it is a sad fact that so many well meaning people suffer from the ‘It was great for me – It must be good for everyone’ syndrome (some with the caveat “Well almost everyone”), and university education is one of them. The vast majority of graduates agreed with Tony Blair’s slogan of having 50% of young people having degrees, but very few thought about “How do we massively realign the economy, over a very short period to provide the well paid jobs these people will need?” There was no plan then, now or at any time in between.

    Even in the Lib Dems (very well educated and also supporting of diversity) there are many who don’t see conflict between those two factors. Diversity of education routes is a strength and provides opportunity for more. It is not a weakness which demands ever more resources are poured into the University Sector.

    In addition of course, very few people wanted to pay the substantial increase in taxes that would be needed to allow so many more of the new generation to go to university and be funded in the way they were – and so we ended up with student loans.

    That of course led to another ill thought out disaster.

  • William Francis 4th Oct '21 - 12:24pm

    @Peter Martin

    As the economies of eastern Europe expanded (partially due to integration with Europe), wage differentials between west and east have fallen, which is one of the reasons why fewer and fewer eastern Europeans want to work here as seasonal agricultural labourers.

    As for the problems of free movement, the EU had a solution- introduce it for gradually for former soviet block countries. It was the UK that embraced a head first rush at time France and Germany (among others) were being cautious. Any problems free movement caused are on the British government.

  • Barry Lofty 4th Oct '21 - 12:42pm

    As my reply to John Martin got lost in the ether! I can only endorse Wiiiam Francis’ repost!

  • Barry Lofty 4th Oct '21 - 12:43pm

    Sorry William!!

  • William Francis 4th Oct '21 - 12:44pm

    @David Evans

    Except Blair didn’t say he wanted 50% of young people to go to university. He wanted them to go into higher education (which includes colleges and the like). Most, even today don’t, about a third do though.

    Nobody thought we’d need to realign the country because it was supposed to be in the process of realignment in a way to make the HE target a necessity, through technological change and market demands.

    It didn’t.

    What happened university graduates displaced secondary school leavers in a large variety of occupations, such as entry-level office work and clerical employment.

    The central issue is that alternative forms of HE are woefully underprovided due to a long-ingrained disdain towards non-academic education from policy makers and the middle classess. It’s all very well complaining too many people go to university but, HE is increasingly necessary for a well paying job and the alternatives are few, underfunded, and sneered at.

  • Peter Martin 4th Oct '21 - 12:45pm

    @ William Francis,

    There’s population decline in the western parts of the EU too.

    https://english.elpais.com/society/2021-04-21/spains-population-falls-by-106000-people-in-2020-after-four-years-of-growth.html

    They depopulation of the peripheral regions in the EU isn’t simply due to migration to the UK. That’s probably just a minor factor as far as the EU is concerned. However it is a sign of a badly run economy when this is allowed to happen. We’ve seen that for at least a couple of hundred years in Ireland which has only solved its unemployment problem by the use of emigration ships!

    The Republican movement with full justification blame this on the UK government when Ireland was part of the UK. The thing is they Republican government didn’t do any better when it wasn’t.

  • Barry Lofty 4th Oct '21 - 12:57pm

    Now I notice the spell check has changed Peter’s name to John, sorry Peter, I had better give up today!

  • David Evans 4th Oct '21 - 2:01pm

    Hello William,

    Thanks for the response – as you say Tony Blair’s target was 50% into higher education which included colleges providing qualifications such as HNDs and several other qualifications as well. He didn’t say it was just university (which is why I didn’t say it) but most people (including most university graduates) interpreted it as such, and it is this that led to the massive over increase in demand for university places.

    However, I think you may be mis-remembering the situation back then when you say “Nobody thought we’d need to realign the country because it was supposed to be in the process of realignment …” Certainly there were many, including the Lib Dems who were very concerned about the state of the economy and the unwillingness of the government (up to then Conservative but also Labour from then on) to support the high tech innovation needed to make the UK a high value added, high wage economy.
    Indeed this was massively undermined by the policy of privatisation, which resulted in massive cuts in investment in those industries in the drive to drive short term profits upwards ever faster.

    As you say undergraduates simply replaced school leavers – e.g. in accountancy where degrees rapidly replaced A levels as a minimum requirement, and in nursing too where the need for an academic degree almost totally undermined a vocational calling as the sine qua non of that career. Indeed it is reported that taking a nursing degree is being used as a way to get degree funding that can be skilfully switched to be used to support another degree at a later stage once the time limits are complied with.

    Likewise as you put it “alternative forms of HE are woefully underprovided due to a long-ingrained disdain towards non-academic education from policy makers and the middle classess” – to which I would add, sadly but objectively, “especially those with degrees.” 🙁

    In so many ways education in the UK has been badly served by politicians over far, far too long a period and students and the UK as a whole have suffered greivously.

  • William Francis 4th Oct '21 - 5:50pm

    @Peter Martin

    You are assuming external migration is the cause of depopulation. Low birth rates have generally been seen as the cause of this throughout the rich world.

  • William Francis 4th Oct '21 - 6:18pm

    @David Evans.

    Hi David,

    Thanks for your response.

    Though you are right many were concerned about the lack of high-value-added industry and the government did little to address this, I was mainly referring to the rise of the idea of the “knowledge economy”, that there would be a massive explosion in the number of professionals from management consultancy, PR and IT, to marketing, recruitment, and finance.

    As for the effects of privatization (excluding utilities), it mostly affected heavy industries (coal, steel, and shipbuilding) which under nationalization had been under managed decline, with greater emphasis being placed on (the mostly privately owned) light industry that was growing in the midlands and the south. I’d argue the short-termism was not necessarily a product of having private shareholders (in place of the state) but rather having them in an age of shareholder primarcy. If co-ownership had been introduced or the SOEs had become cooperatives (like Tony Benn and Jo Grimond had in mind) the situation may have been different.

  • William Francis 4th Oct ’21 – 5:50pm:
    You are assuming external migration is the cause of depopulation. Low birth rates have generally been seen as the cause of this throughout the rich world.

    Some countries suffer from both…

    ‘How free movement is wrecking Romania’ [November / December 2018]:
    https://www.cpbml.org.uk/news/how-free-movement-wrecking-romania

    Romania has become a country populated mainly by the old and by children. Working-age adults are thin on the ground, except in August and around Christmas, when they come home for a visit.

    And land prices have slumped, says a September 2018 report by Colliers International. Properties in the capital Bucharest are just 50 per cent of their 2008 values – that’s one year after Romania joined the EU. […]

    One of the most acute areas of labour shortage is in medicine. For all the talk of an NHS crisis when Britain leaves the EU, the real crisis is in countries such as Romania. Between 2011 and November 2013 fully a third of Romania’s hospital doctors left the country. […]

    Meanwhile, a report from a German political institute, the Friedrich Ebert Foundation, in 2014 suggests that the outflow of workers is set to continue. Almost 80 per cent of young people (15 to 29) polled by the institute wanted either strongly (42 per cent) or very strongly (36.9 per cent) to be established outside Romania within 10 years.

  • William Francis 4th Oct '21 - 7:06pm

    @Jeff

    The Communist Party of Britain (Marxist-Leninist) isn’t a trusted source of information, and of course, the people who would defend the Berlin Wall and Soviet-era internal passports aren’t fans of the free movement of people.

    Besides, why should people be forced to live in a country that they don’t want to live in and be prohibited from living in a better place? Is it because we should be trying to reinforce the privileges of people already living in the nicest bits of the world? Or do people exist for the needs of the state and should not move without its consent?

    Many educated young people are emigrating from Hungary. Should they be forced to live under the tyranny of Viktor Orban?

    Perhaps if states had to compete for citizens they’d be less inclined to treat them badly.

    https://www.theguardian.com/commentisfree/2018/apr/10/orban-election-hungary-europe-future-past

  • William Francis 4th Oct ’21 – 7:06pm:
    The Communist Party of Britain (Marxist-Leninist) isn’t a trusted source of information,…

    They are the publisher. The facts, figures and quotations cited in the article are from the following sources (in order): Colliers International (global real estate services company), The Times, The Guardian, The Financial Times, Deutsche Welle (Germany’s public international broadcaster), The Independent, the Romanian Association for Health Promotion, the Friedrich Ebert Foundation (a non-profit institute funded by the German government), the United Nations, and the Institute of Employment Rights (UK).

    Which, if any, of these do you consider “isn’t a trusted source of information”?

  • John Marriott 5th Oct '21 - 8:20am

    Great news, the temporary visa scheme has so far attracted 27 tanker drivers from the EU. That’s 223 to go then. But what about the rest? I’m sure that ‘Jeff’ will have the answer, when he’s finished with the Communist Party. After all, I believe that this thread was supposed to be about the shortage of key workers, before it got dragged off course in the usual LDV way!

  • Steve Trevethan 5th Oct '21 - 8:20am

    Might Mr Blair’s policy concerning tertiary education have been a planned prelude prior to the introduction of student fees which, in conjunction with rising/raised housing costs, have created a dangerous inter-generational imbalance?

  • Peter Martin 5th Oct '21 - 1:29pm

    @ John Marriott,

    “After all, I believe that this thread was supposed to be about the shortage of key workers, before it got dragged off course in the usual LDV way!”

    There’s always a shortage of everything which has a price. Key workers and not quite so key workers. The level of the price indicates the extent of the shortage. If there’s a glut of strawberries, for example, they are priced higher than if the crop yield is poor. There is greater shortage of players with the skills to play football at the highest level so they are paid more than those who play at the next level down. They are still in short supply but not quite such short supply.

    So the solution to the problem is obvious.

  • Being silent on Brexit is not doing us any favours. We are heading for a recession, we should be warning the public now. Instead we are hiding behind the couch in the living room when 50% of the electorate are saying Brexit is going badly

  • Peter Hirst 6th Oct '21 - 3:11pm

    The idea of becoming more high wage and thus encouraging home workers in some labour shortage industries sounds like a good idea. It as a strategy needed a long-term plan, not a knee jerk response to the consequences of Brexit. This government should have had a plan before campaigning for leaving the EU, not allow market forces to deliver the strategy with all the hardship involved.

  • Peter Martin 8th Oct '21 - 1:21pm

    Christian,

    “Being silent on Brexit is not doing us any favours. We are heading for a recession, we should be warning the public now.”

    With the implication that if we rejoin we could enjoy similar low levels of unemployment to France perhaps?

    2020 8.62%
    2019 8.44%
    2018 9.02%
    2017 9.41%

    I don’t think you’ll be persuading too many that this is the correct course of action. The immediate problem is almost certainly going to be the opposite of the one you’re suggesting. ie an Overheating economy due to the amount of money the Govt has recently spent into it. We are already seeing shortages of labour and inflationary pressures.

    This probably won’t last long. We’ll see tax rises and possibly interest rate rises. The danger is that the Govt will overdo it and bring about the recession you are predicting. But that will be our C*ck up! Not the EUs.

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