Don’t bet British staff will replace migrants

Is Christmas dinner in jeopardy, again? Forgive me for bringing up the holiday in these pages three months earlier than is remotely appropriate, but it’s becoming a pertinent question in the food industry, not to mention a niggling concern for home chefs across the country, most of whom had to forgo their normal dinner plans last year.

There could be fewer pigs in blankets being passed around the table again, but unlike last year, the reason may not be mandates against indoor socialising. Instead, it’s the labour shortage across major industries which seems a long way off resolution.

It’s a consequence of the pandemic, and a myriad of other factors, that has the boss of Iceland, Richard Walker, warning that Christmas could be “cancelled” once again.

In the case of Christmas, it’s food production and supply chains that are under strain. Not enough workers to produce the meat, not enough drivers to transport what has been secured.

But this is only one example: from supermarket supply chains to staffing bars and restaurants, the worker crunch is being felt across service and goods-producing industries, including hospitality, construction, and agriculture. These shortages have many causes: at the top of the list, a combination of Covid and Brexit has led to a drain of workers from Britain.

No one is sure just how many migrant workers left the UK at the height of the pandemic, but it’s estimated that more than a million people returned home, and with the new rules concerning immigration from the EU, many of them can’t get back (or haven’t bothered to try).

This has created major vacancies in vital sectors, resulting in headlines in recent weeks about perfectly good food being tossed away, and campaigns to recruit somewhere close to 100,000 lorry drivers to fix the disruptions to the flow of goods across the UK.

Bad news for consumers. But on the face of it, good news for British workers, who suffered the plight of low pay and stagnant wages in the 2010s. They could be in for a longoverdue pay raise, for doing jobs that much of society (politicians included) took for granted for years.

Furthermore, it’s not a bad jobs market to come off furlough. As the scheme nears its end, workers who find that their job no longer exists will be coming across employers that are more amenable, post-pandemic, to retraining, upskilling and offering flexibility – just about anything to get workers through the door.

But are we so sure British people will want to fill all these jobs? If native workers have been holding back from taking up vegetable field jobs and overnight lorry hauls due to a perception of “depressed wages” caused by a mass influx of workers from abroad, this will be a temporary problem with a straightforward fix.

For the solution to be that simple, it would need to clash with evidence from the past decade that immigrants rarely displace native workers and that arguments around importing “cheap labour” are often overstated.

From the Migration Advisory Committee report in 2014, which found migration helped to boost job numbers in Britain, to the London School of Economics assessment before the Brexit referendum that found lower wages more strongly linked to the financial crash than immigration, the argument that a migrant’s job comes at the cost of a native workers’ opportunity is difficult to stack up.

That doesn’t mean there hasn’t been some depressive effect on wages towards the bottom of the pay scale, but the true picture is more nuanced. It is one in which fewer workers from abroad will give native workers an upper hand when negotiating with employers, but also one in which some jobs don’t get filled, because for the price to be right the business model is no longer viable.

We may soon see evidence of both: discoveries in certain sectors that native workers are happy to show up when pay goes up too. And in others, chronic vacancies – some, possibly in food supply or social care, that result in painful consequences if not filled soon.

Here the political impact will start to grate. As if there weren’t enough problems exacerbated by Covid, the Government is looking at a difficult trade-off going into the winter months. It will either have to settle for permanent shortages in some industries, or consider compromising on its new migration rules.

There are levers ministers can pull to reduce bureaucracy and make it easier for employers to recruit. But having cut off so much “low-skilled” migration after Brexit, they are taking a big gamble that the UK has enough workers who aren’t just up to the jobs, but who want to do them.

If the gamble goes awry, the price could be steep.

The political impact will start to grate as ministers face a difficult trade-off