Brexit could mean competition with Gulf for foreign labour

The Gulf region has been keen to strike a free-trade deal with Britain since the Brexit vote in 2016. Both sides sense an opportunity to build closer relations. Yet in some respects, leaving the EU will make Britain and the Gulf states not allies but rivals, and rivals for a very valuable resource: foreign labour. The essence of the problem is that both have economies that require more labour, or labour with different skills, than their populations can sustain. For the Gulf, this looming competition with the UK may even rise to the level of a national security issue, in so far as it affects the dominant economic model of the region.

In the UK, one of main issues is staffing the National Health Service, Britain’s comprehensive public health service. The service is one of the single largest items in the UK’s budget — the country spends around 7 per cent of its GDP on it — yet it requires more skilled and semi-skilled labour than Britain’s citizens can provide. An estimated 20 per cent of NHS staff are not British citizens.

This labour, since the expansion of the European Union to eight eastern European countries in 2004, has often been supplied from countries such as Poland and Lithuania. The exact number of citizens from the so-called “A8” is a matter of fierce disagreement and politicisation. Over a million came to the UK in the 10 years after 2004, but hundreds of thousands also left.

But what is not in doubt is that the current number is dropping. With the UK leaving the EU next year, that labour pool is shrinking rapidly. European workers, unsure of their rights in the coming years or sensing a more hostile atmosphere from businesses and people, have left. The year after the Brexit vote, net migration from the A8 — the number of those arriving less than the number of those leaving — fell to just 5,000, the lowest number since 2004. The exodus is real. This is where the rivalry with the Gulf comes in, because the places that Britain is seeking to recruit new workers from are precisely the places that Gulf states also source skilled labour from, placing the two in direct competition.

The NHS is not the only industry reliant on foreign labour. Britain’s Office for National Statistics surveyed new arrivals from eastern Europe after 2004 and found they were clustered in agriculture, manufacturing and retail, as well as in education and health. If they leave, shops, restaurants, hotels, farms and factories will be forced to fill jobs rapidly. This mirrors the demand for foreign labour in the Gulf.

But the area that has attracted the most public attention in the UK has been the NHS. In November last year, the Department of Health admitted it was seeking to rapidly recruit 5,500 nurses from India and the Philippines. But the NHS will need more, with the service facing a shortage of 40,000 nurses. For other medical staff, the numbers are worse: across the whole NHS, there are 100,000 vacancies. (To put that in context, the total number of workers in the healthcare sector in Saudi Arabia, the Gulf ’s largest economy, is 250,000.)

The medical field in the Gulf is also heavily dependent on foreign medical staff — from other Arab countries, India and the Philippines. While the Gulf will always be a draw for Arab nationals, workers from other countries could easily decide to go to the UK instead. Quite apart from the attraction of living and working in the West, there is the lure of eventual citizenship. This will create a direct competition for staff.

Moreover, if the UK is looking for foreign workers, a more obvious place to look is not India or the Philippines, but Dubai, Abu Dhabi and Doha. All three cities — and others across the Gulf — have highly skilled medical staff, with experience in world-class medical facilities, and with strong language skills. Recruiting staff directly from the Gulf, then, is another possibility.

The way Gulf states react to this competition could affect industries beyond healthcare — it could extend to retail and food services as well, for starters. The most obvious way to compete would be to increase salaries, which would draw workers in, but also draw them from related professions, such as education or social work. Increased salaries would also carry increased prestige, which might tempt more Gulf nationals into medical careers. Because the populations of the Gulf are relatively small, minor changes can spark bigger policy shifts. Take the UAE, for example, where there are 25,000 nurses across the whole country; just 2,000 of them leaving would be a considerable percentage.

In addition, the UAE in particular is growing rapidly and needs more nurses than it currently has. Increased competition for healthcare workers could also impact its hopes of being a centre for medical tourism. By far the simplest way to recruit and retain staff would be to offer higher salaries and other benefits that boost the take-home pay of workers — one of the enduring attraction of the Gulf for expat workers, after all, has been the absence of personal taxation. But the higher salaries would also spark competition from

Workers could easily decide to go to the UK. Quite apart from the attraction of living and working in the West, there is the lure of eventual citizenship

other countries, though it might also attract even workers from the West.

And it might affect foreign policy. Because the Gulf states are such a draw for their populations, both the Philippines and India maintain close ties. While that will not change, Gulf states might seek out new country partners: Indonesia, for example, with a youthful population and a faith in common, could become increasingly important. That would entail a diplomatic shift, too.

These surprising shifts could come about relatively quickly, and all because of a political decision thousands of miles away. The ease with which people can move around the world means that governments have to compete with each other for the best people. Ironically, the ties that bind the UK and the Gulf, in particular similar working conditions and a common working language, will actually force them into competition. The effect of a vote that was entirely about Britain’s domestic politics will wash up on the shores of Gulf states — who will need to plan accordingly and quickly if this is not to adversely impact their economic wellbeing.

Faisal Al Yafai has worked for The Guardian and the BBC, and reported on the Middle East, Eastern Europe, Asia and Africa