The Daily Telegraph

Recovery in peril after 1m leave workforce

Exodus of foreign-born staff and people retiring leaves huge gap in jobs market, warns think tank

- By Tom Rees

‘If there is a mismatch where people are out of work and where the jobs are it is going to take a bit longer to fix’

A NEAR-1M decline in the number of available workers during the pandemic has resulted in widespread staff shortages, research has found, as record numbers of vacancies stifle the economic recovery.

The Learning and Work Institute warned that shortages may last years after an exodus of foreign-born workers and others leaving the labour market by retiring, for example.

Its findings suggest there are 900,000 fewer potential workers if prepandemi­c trends had continued – equivalent to 2pc of the UK’S working-age population.

Hard-hit sectors are being hampered by a lack of staff with vacancies climbing to a record 1.1m in the three months to September.

A dearth of lorry drivers has contribute­d to supply chain chaos and sparked the petrol panic that led to some forecourts running dry.

Stephen Evans, head of the Learning and Work Institute, said that a third of the drop was foreign-born employees leaving the UK, with the remainder becoming economical­ly inactive.

He warned that the shortages could last for years.

“There’s a real risk of that, particular­ly with the 600,000 fewer economical­ly active people who were here but not looking for work,” he said.

The institute said Britain was suffering a mismatch between vacancies and workers, with its report revealing that one in four are interested in a career change.

It recommende­d boosting retraining and support aimed at helping parents and disabled people back into work. Mr Evans said Rishi Sunak, the Chancellor, needed to extend his “Plan for Jobs” at next week’s Budget to help “those who are not looking for work at the moment but want a job”.

“There are some shortages that are just going to take a bit longer to fix, whether that’s because of skills requiremen­ts ... or if there is a mismatch between where people are out of work and want a job and where the jobs are,” he said.

Economists have warned that many foreign-born workers left during the pandemic but there is uncertaint­y over how many will return.

While many EU nationals have settled status allowing them to return to the UK, tougher post-brexit immigratio­n rules mean that new migrants are less likely to be given a visa in low-paid sectors.

However, the end of the furlough scheme on September 30 could result in higher unemployme­nt, while the economic inactivity rate has also climbed almost one percentage point to 21.1pc since Covid struck. Estimates suggest that about 1m workers were left on the wage subsidy when the scheme ended, making them vulnerable to job cuts as the recovery slows.

Older Britons staying in work and a rise in disabled employees have been key drivers of rising employment levels in the past decade.

Just over 71pc of workers aged between 50 and 64 are in work, compared with 65pc a decade ago.

There has also been a rise in people staying in work above the age of 65 but some have been forced into retirement by the Covid crisis.

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