Cyprus Mail
Our View

Our View: UK economy needs foreign workers to operate smoothly

HOW ironic that one of the main reasons Britons voted for Brexit was to stop immigration from EU countries, something that is now causing a major labour shortage in the UK. According to a report in Thursday’s Guardian newspaper, Britain’s manufacturers were facing “the biggest shortage of skilled workers since 1989 amid record levels of UK employment and falling numbers of EU27 nationals coming to the country to work since the Brexit vote.”

A survey of more than 6,000 employers, carried out by the British Chambers of Commerce, found that 81 per cent of manufacturers and 70 per cent of service sector firms had difficulties finding staff with the necessary qualifications and experience. Net migration from the EU was at a six-year low, many workers concerned about their status after Brexit, which was compounded by the weaker sterling, which made pay less attractive. This at a time when UK unemployment is at its lowest level since 1975.

The UK government’s plan is to reduce immigration from the EU by 80 per cent, when Britain leaves, which will almost certainly exacerbate the problems being faced. One of the measures for achieving this is the imposition of a £30,000 threshold for the issuing of work permits, although many reservations have been expressed by businesses. Who will be doing the lower-paid work – in restaurant kitchens, farms, hotels etc – that Britons refuse to do? These businesses cannot afford to double wages in order to compete in the labour market for British workers so who would they employ if immigration from the EU is restricted to skilled workers?

The labour shortage will push up wages in certain sectors, but it will also push up prices and adversely affect businesses. Companies will be allowed to hire foreign workers, including for low-skill, low-pay jobs, but the issuing of work permits would involve high costs and the inevitable bureaucratic delays. The reality is that in all developed countries, low-paid jobs are done by foreign workers from poorer countries. Britain may offer these jobs to workers from the third world instead of EU nationals, after it leaves the EU, but would immigration then be significantly reduced?

The significant reduction of immigration is set to be another empty promise by the ‘leave’ campaign, because the fact is that the British economy needs foreign workers to operate at its optimum level. The recruitment difficulties faced by British companies at present are a direct consequence of Brexit and can only be tackled by hiring foreign workers. Immigration is set to continue regardless of whether there is a deal with the EU or a hard Brexit.