According to the government, the major driver in persuading British voters to support Brexit was the desire to curb immigration to the UK (from the EU, of course – the obvious elephant is that slightly more than half of UK immigration comes from outside the EU). It is ironic that the government is now stating that immigration will not fall upon the nation’s leaving the EU for several years and may indeed rise.
This position has been underlined by a survey conducted by the British Chambers of Commerce (BCC) which involved 7300 companies from the manufacturing and service sectors. The survey revealed a 9% increase on members wishing to hire staff in the last quarter, but identified “high levels of recruitment difficulties” in finding the right staff or affordable staff for these roles. This shortage in suitable staff poses a threat to economic growth.
Both sectors studied reported solid growth over the quarter and the report noted that "confidence in turnover and profitability is improving" with 86% and 77% of manufacturing and service businesses respectively looking to take on new staff. The bad news is that nearly three quarters of manufacturing firms and 58% of service sector companies claimed to be struggling to find the right recruits, able to do the work for the money on offer.
Commenting on the report, BCC’s head of economics, Suren Thiru, noted: "The main issue is finding enough people with the right skills, and of course the workforce is aging. A lot firms are also finding their costs rising and this is deterring business investment, including investing in training their staff. Another emerging issue is whether firms can continue to get workers from overseas both in the run-up to, and after, Brexit. Industries like hospitality and construction are heavily dependent on EU workers."
Mr Thiru identified upfront taxes and charges such as the National Living Wage and the immigration skills charge as being partly responsible for the hiring difficulties with the rising cost of imported materials due to the weakness of Sterling also squeezing business spending.