Businesses are floundering while Whitehall dithers on immigration

You might not know it, but a crisis is looming on the business parks, industrial estates, construction projects and farms of Britain. As the Brexit process dominates politics – and diverts Westminster’s energy away from virtually every other issue – businesses are struggling to fill vacancies and to find the people they need in order to grow.

In some sectors firms report that labour shortages have reached critical levels. A combination of record employment levels for UK-born people, significant falls in immigration following the devaluation of sterling in 2016, and the total absence of job candidates in some areas is biting hard. British Chambers of Commerce surveys show nearly three-quarters of firms trying to recruit are experiencing difficulties – this is at or near the highest levels since our records began more than 25 years ago.

Pragmatic solutions are needed to this acute and immediate problem. Job vacancies at all levels in the workforce are being left unfilled, damaging not only individual businesses and their growth prospects but also supply chains and the wider economy. While many firms report they are investing long term in the training and development of their workforce, this will take years to have the desired impact, particularly for very highly skilled roles. We cannot afford any gap in the supply of skills and labour. Businesses that have not planned ahead for their future needs will be wishing they had.

Yet, with few exceptions, businesses tell us that breezy Whitehall assumptions about artificial intelligence and automation remain years away from fruition. While some jobs may change or disappear in future, businesses will always need people because they are more flexible and adaptable than robots to the fast pace of change in the workplace. There’s no doubt, in the here and now, that UK firms require continuing access to labour, from Europe and farther afield, to plug the gaps.

Amid all the uncertainty our businesses and communities face, the UK government must act swiftly to define an open and responsive immigration policy. Businesses accept that, in future, there will be some form of registration for European workers, but they are equally clear that they must be able to access skills and talent from the European mainland with minimal costs, barriers and delay after Brexit – irrespective of the final settlement between the UK and the EU.

Taking back control of immigration should not mean pulling up the drawbridge. It means knowing who’s coming in and out, and ensuring that only those who are entitled to work in the UK can do so. Tighter enforcement of the law, with individuals and with rogue employers, alike, is much more important to addressing legitimate public concerns over immigration levels than an expensive, draconian and damaging visa or work permit regime. At the same time, firms across the country must demonstrate, day in and day out, real civic commitment to train and invest in staff here at home. We in business must hold up our side of the deal, too.

Civic-minded businesses aren’t making the case for immigration because they’re seeking cheap labour from abroad. Despite the oft-repeated myths, our research clearly shows that a tiny percentage of businesses consciously recruit outside the UK for reasons of cost. Businesses in the communities I represent are far more likely to try to address skills shortages locally, by investing in their workforce or seeking new employees through word-of-mouth advertising or UK recruitment agencies. Firms in a small number of areas, such as agriculture and personal care, do advertise overseas – but only because they fail to recruit local workers to do the jobs on offer.

These skills gaps won’t disappear after Brexit, but many firms’ production targets will be scaled back, and expansion plans shelved, if the loathed and expensive system used for non-EU recruiting is expanded across the board. The current rationing of non-EU work permits is already a clear and present threat to investment in our business communities, and extending that cumbersome system to European workers would make a difficult situation even worse.

A brave government would either unilaterally keep a preferential approach, or adopt a level playing field that radically reduces costs and administrative burdens across the board, rather than put them up. Read more…

Businesses are floundering while Whitehall dithers on immigration