CBI Chief Slams U.K. Government Over Damaging Labor Shortages
(Bloomberg) -- The head of the U.K.’s biggest business lobby criticized the government over labor shortages that are disrupting supply chains, warning they could last for as long as two years and harm the post-pandemic recovery.
While a dearth of truck drivers has dominated newspaper headlines, research by the Confederation of British Industry on Monday showed shortages in roles from fruit pickers and factory workers to mechanical engineers.
CBI Director General Tony Danker called on ministers to fix the issue, which the research showed is caused by a “perfect storm” of Brexit crimping the supply of workers from the European Union, and the pandemic, during which many people from the bloc returned to their home nations.
“Standing firm and waiting for shortages to solve themselves is not the way to run an economy,” Danker said in a statement, adding that the government must do more to match skills policies to roles with the highest vacancies and to make apprentice programs more flexible. “These shortages are already affecting business operations, and will have a negative impact on the U.K.’s economic recovery.”
The remarks show the challenge facing Prime Minister Boris Johnson to repair relations with business after he spearheaded the campaign to leave the EU. Industry leaders have grown increasingly concerned as vacancies have risen to 1.7 million, exacerbated by changes to immigration rules brought about by Brexit. The CBI said a third of manufacturers are concerned labor shortages will limit output -- the highest proportion since the 1970s.
Chancellor of the Exchequer Rishi Sunak has said he’s prioritizing jobs as he seeks to rebuild the economy, which plunged to its deepest recession in three centuries during the pandemic. He has plowed billions of pounds into job centers, apprenticeships and retraining programs.
But the government has also stood firm against some demands from industry.
It’s rejected pleas for EU truckers to be added to a visa program that would allow them to fill an estimated gap of 100,000 people, suggesting firms should pay drivers more in order to entice new recruits. Over the summer, Britain’s horticulture farmers were short of 40,000 seasonal workers, even after the U.K. government granted 30,000 visas.
The government’s furlough program, which has helped pay workers throughout the pandemic, is due to close at the end of this month, potentially leaving a significant number of the 1.6 million to 2 million people still on the program without a job. Yet Danker argued that may not help resolve the shortage.
“Furlough ending is not the panacea some people think will magically fill labor supply gaps,” he said. The CBI said that new job seekers released by industries hit by the pandemic may not be in the same places as where the vacancies are, and that retraining people for different roles will “take time.”
Danker also said ministers should use targeted immigration to fill gaps. “The government promised an immigration system that would focus on the skills we need rather than unrestrained access to overseas labor,” Danker said. “Yet here we have obvious and short term skilled need but a system that can’t seem to respond.”
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