Labour crisis may last up to two years, warns leading UK business lobby

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The labour crisis in the UK may last up to two years if the government continues its stance of not taking action on relaxing visas for foreign workers, Confederation of British Industry (CBI) said on Monday (6), adding that “waiting for shortages to solve themselves is not the way to run an economy”.

“A refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating,” said the CBI director general, Tony Danker, whose group represents 190,000 businesses with more than 7 million employees. 

The CBI has been calling on the UK government to relax its new immigration rules to allow in more foreign workers and ease labour shortages caused by the coronavirus pandemic and Brexit with a claim that it will take two years to train domestic workers and fill the current empty vacancies, as suggested by the government last week.

UK business secretary Kwasi Kwarteng wrote to business leaders last month, calling for firms to hire British workers to deal with labour shortages rather than relying on immigration.

“Businesses are already spending significant amounts on training, but that takes time to yield results, and some members suggest it could take two years rather than a couple of months for labour shortages to be fully eliminated,” Danker said.

As per CBI, drivers, welders, butchers and bricklayers should be classed as shortage occupations for immigration purposes,which in turn will allow not only easier access to visas, but also for the employers sponsoring them to pay salaries below thresholds for migrant workers under Britain’s new migration system.

Despite the furor from various business and agriculture lobbies, the government has reportedly been reluctant towards the idea of making any relaxation in the current immigration rules. 

With the furlough scheme due to be removed at the end of this month, Kwarteng has also suggested that domestic workers should be a priority, telling bosses that “many UK-based workers now face an uncertain future and need to find new employment opportunities.”

The CBI added it did not expect the end of the government’s furlough programme on Sept 30 – when several hundred thousand private-sector workers are likely to become unemployed – would make it significantly easier for companies to find staff.

“Furlough ending is not the panacea some people think will magically fill labour supply gaps,” said Danker. “These shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery.”

A lack of HGV drivers has been dominating the headlines in recent weeks as retailers continue to struggle to get new supplies on the shelves of their shops.