Business News Round Up (17/01/2023)
UK worker shortfall due to Brexit curbs estimated at 330,000
The post-Brexit UK economy is facing a shortfall of more than 300,000 workers as the result of ending free movement of labour with the EU, according to a new estimate by leading researchers. The joint assessment from the UK in a Changing Europe and the Centre for European Reform think-tanks said that the ending of free movement was constricting the UK economy and “contributing significantly” to labour shortages in lower-skilled sectors, including logistics, construction, and hospitality. Jonathan Portes, professor of economics and public policy at King’s College, London, who co-authored the report, said the shift in migration patterns was “a feature, not a bug”. “The longer-term impact on the UK labour market will be profound,” he added. After the UK left the EU it shifted to a points-based immigration system that allows skilled workers earning more than £25,600 per year or £10.10 per hour to obtain work visas, but the research found the system was “not liberal enough” to compensate for the loss of EU workers. The estimates emerge as the government takes steps to try and tackle the effects of the so-called “great retirement” caused by the Covid-19 pandemic, which has left 500,000 more people economically inactive than in 2019.
https://www.ft.com/content/11414939-5fb6-48bd-8b84-baa0819fe821
Average pay rising but still falling behind inflation figures show
Pay excluding bonuses rose by an annual 6.4% in the September-to-November period, the biggest increase since records began in 2001 excluding jumps during the COVID-19 period which were distorted by lockdowns and government support measures. The ONS figures showed a wide gap between strong pay growth in the private sector and much weaker increases for public sector workers, many of whom are locked in wage disputes with the government and have carried out a wave of strikes. Private-sector total pay rose by an annual 7.1% in the three months to November compared with 3.3% in the public sector, the ONS said. Meanwhile there are some signs that the Labour market might be flattening. There were 1.161 million job vacancies on average across October to December 2022. This was down 75,000 on the previous quarter, as employers continue to cite economic pressures. The unemployment rate remains at 3.7 per cent. The real value of people’s pay continues to fall, with prices still rising faster than earnings,” said Darren Morgan, director of economic statistics at the Office for National Statistics (ONS).
Scotland’s employment rate reaches record high
Scotland’s employment rate has reached a new high, despite the latest figures showing a small rise in the number of people who are out of work. Data from the Office for National Statistics (ONS) showed 76.1% of people aged 16 to 64 were in work from September to November 2022. That compares to 75.9% recorded over the three months from August to October, which had been the joint highest since the labour force survey series began in 1992. Scotland’s employment rate was above the 75.6% recorded for the UK as a whole, with the country also having the highest rate of the four nations. According to ONS data, 2,725,000 Scots aged 16 and over were in work in the period September to November, with this total 8,000 higher than the previous quarter and up by 48,000 over the year. There were 92,000 Scots who were unemployed over September to November – a rise of 1,000 from the previous three months but 8,000 fewer than was recorded a year ago. Employment Minister Richard Lochhead said: “The employment rate in Scotland remains high despite the turbulent economic circumstances, including the continued impact of Brexit, high inflation, and the cost-of-living crisis.
https://www.insider.co.uk/news/scotlands-employment-rate-reaches-record-28973216
Fewer firms are engaging in training as inflation and recession bite
Employers are keen to engage in training but there is a lack of awareness of skills reform programmes. Fewer respondent firms are increasing their investment in training and development after a year of post-pandemic catch-up growth last year, while a majority of respondents say they are unaware of some key Government skills reform programmes according to the 2022 CBI Education and Skills Survey. The survey, completed by 273 businesses of all sizes and sectors across the UK, revealed that the proportion of firms intending to increase investment in training and development over the next year has fallen (38% compared with 53% in 2021). But 47% of business respondents said they were planning to maintain investment in training and development, compared with 43% in 2021. There was a widespread lack of awareness of key Government skills reform programmes. 4 in 5 of respondents said they were unaware of plans to introduce the Lifelong Loan Entitlement (LLE).