Decline of cheap labour ‘is a threat’

THE WORLD of work is going to be “reshaped” because of the end of unlimited cheap labour – threatening job losses, business closures and weaker pay growth, a new report says.

The Resolution Foundation said the UK’s labour market was at a “tipping point” because of falling migration and rising labour costs.

The think-tank warned that failure to tackle the issues in the Brexit negotiations could be “hugely disruptive” for the economy. The recent era of increasing numbers of people being in lowpaid jobs was coming to an end, fuelled by a reduction in the supply of workers, said the report.

Migration is already falling, a trend likely to continue because of uncertainty about the status of workers, improved job opportunities in Europe and the fall in the value of the pound, it was predicted. Torsten Bell, director of the Resolution Foundation, said: “Leaving the EU will have a profound effect on people’s lives, and nowhere will this be felt more strongly than in the workplace.

“The British labour market is at a tipping point, with big Brexit and non-Brexit related changes from lower migration to a higher minimum wage coming together over the next few years.

“How government and firms respond to these changes is as central to preparations for Brexit as negotiations in Brussels.”

Economic analyst Stephen Clarke added: “Low-paid labour will no longer be as cheap and will no longer be as available as British firms have grown used to. Businesses will respond to these changes in a number of ways, depending on their ability to automate or recruit more workers, but in almost all cases, they’ll need a helping hand from government to get the wider economic conditions right.” BORIS JOHNSON has dismissed leadership speculation, saying Theresa May has shown “unbelievable grace and steel”.

The foreign secretary said the PM had “put things back together and got the show back on the road” after a “difficult” election.

Asked about any leadership contest, he said there would not be a vacancy “for a very long time”.

He also appeared to backtrack on his previous support for axing the public sector pay cap.

In an interview with BBC Radio 4’s programme, Mr Johnson said he agreed with Chancellor Philip Hammond on public sector pay and the need to take a “fiscally sensible and responsible” approach.

A source close to Mr Johnson had reportedly previously said the foreign secretary supported a better pay deal for public sector workers and believed this could be done without causing “fiscal pressures”.

Mr Johnson, who was briefly a rival to Mrs May in the Conservative leadership contest which followed David Cameron’s resignation last year, sought to play down talk of a fresh contest.

He said: “The last thing people want is any more of this kind of nonsense. They want to see a long period of stability and calm and progress for the British people.”

Earlier Mr Johnson said Donald Trump’s unconventional approach to politics has “gripped the imagination” of people around the world, but the UK was helping to “mitigate” the approach taken by his White House, Boris Johnson said.

Mr Johnson praised the US president’s use of Twitter, which has “engaged people in politics” but acknowledged that the UK does not agree with everything Washington says.

North Korea’s missile tests have seen Mr Trump respond with a series of messages putting pressure on China to act and Mr Johnson also called for Beijing to do more to tackle Kim Jong-Un’s regime. Mr Johnson insisted that the UK was prepared to stand up to Mr Trump where it disagreed with him.