The immigration restrictions in the United Kingdom, which were introduced after leaving the European Union, have led to a shortage of 330,000 workers in the country. Sectors with low-skilled labour, such as retail, hospitality, transport and storage, are particularly hard hit by the end of free movement of persons between the UK and the EU, reports the London-based think tank Centre for European Reform (CER).
According to the economists of the think tank, the United Kingdom has lost about 1 percent of its workforce due to the impact of Brexit. Although the departure from the EU led to an increase of 130,000 workers from outside the EU, 460,000 fewer workers came from the EU due to the stricter immigration rules, the economists said.
The UK Government promised to curb the supply of cheap labour from Europe when it introduced a new immigration system after Brexit. The Conservative Party of current prime minister Rishi Sunak pushed for leaving the EU at the time, but the current government is now struggling to cope with the economic consequences of that decision.
The labour shortage is also contributing to strong wage growth in the UK, making it harder for the Bank of England to fight inflation.
“A combination of higher wages and prices and less production is likely, especially in work that is difficult to automate,” warn the CER economists.
The largest British employers ‘ organisation, CBI, called on the government in November last year to allow more skilled migrant workers to tackle the country’s economic problems. According to the organization, the labour shortage leads to increased stagflation. That is a situation in which high inflation slows economic growth, and unemployment remains high.
The British farmers ‘ union NFU also called on the government to be flexible with visa rules for foreign workers. Due to the departure from the EU, many workers from mainly Eastern Europe have returned to their own country and British agriculture is very dependent on foreign labour.
