Mel Stride, the Secretary of State for Work and Pensions, has admitted that loosening immigration rules to allow more foreign workers to come to the UK would abate staff shortages, but government remains unlikely to budge on the matter.
From farming to house building and hospitality, there are growing calls from across the UK economy for the government to help tackle chronic staff shortages, even if only in the short term, by making it easier for companies to recruit workers from abroad.
“I do think that it is far better for us to encourage domestic workers into the labour market than it is, all else being equal, having increasing migration,” Stride said in an interview with The House Magazine.
“But it is true that migration is a relatively quick and easy lever to pull to resolve labour shortages and boost the economy.”
Not every workforce crisis facing Britain is the same. The collapse of the local rental market, driven by the proliferation of Air BnBs and holiday homes, is one reason why the Lake District tourism sector is severely short of labour. Meanwhile, the construction industry faces a tough battle in trying to make the ageing profession more an attractive career option for young people.
But in the vast majority of cases, there is a common contributing factor: the fall in the number of overseas workers, compounded by the pandemic and post-Brexit immigration restrictions.
Tony Danker, director general of the Confederation of British Industry (CBI), last month called on the government to take a more pragmatic approach to economic immigration by making it easier for businesses to hire workers from abroad, even if only on a temporary basis. Danker said ministers privately admit to him that doing so would help tackle gaps in the workforce.
But even though Stride now publicly concedes what fellow ministers seem to have admitted in private, the government is showing no signs of a major shift in policy when it comes to the issue of economic immigration. Prime Minister Rishi Sunak and Chancellor Jeremy Hunt are focused on getting millions of jobless Brits into the workforce, with plans led by Stride. They argue that measures to tackle domestic economic inactivity, expected to be outlined in a forthcoming White Paper, will render any increased need for overseas labour obsolete.
However, industry representatives who PoliticsHome spoke to said that while they support addressing economic inactivity, doing so will take time whereas sectors need more workers now.
The construction industry will need 225,000 additional workers by 2027 to meet demand, or 45,000 new recruits a year, according to the Chartered Institute of Building (CIOB). Like other industries in the UK, construction has an aging workforce, but struggles to attract young people to take up roles.
Daisie Rees-Evans, the CIOB’s policy and public affairs officer, said ministers must help plug these labour gaps in the “short term” by making it easier for the industry to hire workers from abroad.
“There are a number of contributing factors which are worsening the skills gap including a significant proportion of EU migrants working in construction returning home post-Brexit, and a small percentage of the population entering the industry combined with the large number of workers exiting due to retirement,” she told PoliticsHome this week.
“Promoting construction as an attractive, financially viable and exciting career to future generations is a longer-term project, but in the short-term a commitment must be made to reviewing the current immigration system and the impacts it may be having on industries such as construction that have, in the past, relied heavily on a migrant workforce.”
The food and drink industry is seeing labour shortages “across the board”, from engineers, to packagers, to machine operators, said the Food and Drink Federation’s (FDF) Caroline Keohane.
“It’s very much holding back growth and investment,” she explained.
“We have examples of companies looking to expand production, maybe by going from two production lines to three, but they’re unable to do so because they don’t have the people.”
The FDF is urging the government to help plug labour shortages in the food and drink supply chain by “widening the scope” of workers that companies are able to recruit from abroad. Adding professions like butchers, production operatives and engineers to the Home Office’s Shortage Occupation List would go some way to easing pressure on the industry, she said.
“Where automation isn’t a solution overnight, and where you cannot hire people domestically, we do see a role for a targeted migrant scheme as part of that solution,” said Keohane.
The Shortage Occupation List contains workers that the government deems to be in short supply and that can be recruited from abroad, provided they meet certain criteria. However, the Migration Advisory Committee (MAC), which advises ministers on matters relating to migration, has not published a review of the list since 2020, to the frustration of industry groups like the FDF.
Tim Farron, the Liberal Democrat MP for Westmorland and Lonsdale, is imploring the Home Office to help reverse a “real collapse in the size of the workforce” in the Lake District tourism industry.
According to Cumbria Tourism, over 60 per cent of employers in the national park are operating below capacity due to staff shortages. While the post-Brexit fall in European labour is not the sole reason, it is a big part of the problem, said Farron, with nearly 50 per cent of the Lake District’s tourism workforce in the run up to the 2016 referendum having been comprised of workers from the European Union.
“After London, the Lake District is the second biggest tourist destination in the country and yet we have a relatively small population. A national park with 40,000 or so people living in it, more than half of whom are retired, cannot service 20 million visitors every year,” said the former Lib Dem leader.
“We’ve always needed help, that’s just the nature of the area.”
Farron has urged the Home Office to create a youth visa scheme making it easier for young people in major European countries like Spain, France and Poland to take up jobs in the Lake District and help resolve what is becoming a “major, major problem” for the beloved national park.
“We have another summer approaching with more than half of my businesses having to cut corners and be less profitable because they don’t have enough staff. Pubs are opening on fewer nights or not serving food. Any manner of tourism business that you can think of, whether it’s accommodation, food, activities or leisure, many of them are not able to meet the demand,” he said.
A Home Office spokesperson said: “The public rightly expects us to control immigration, which is why our points-based system delivers for the whole of the UK by balancing prioritising the skills and talent the UK needs with encouraging long term investment in the domestic workforce.”
By Adam Payne
Additional reporting by Tali Fraser