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UK labor crisis could last up to two years: CBI warns

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
People walk during the morning rush hour in the financial district of Canary Wharf amid the outbreak of the coronavirus disease (COVID-19) in London, Britain September 28, 2020. (Reuters photo)

The labor crisis could last for up to two years, the UK’s leading business lobby group has warned, as it called on the government to relax its new immigration rules to allow in more foreign workers.

The Confederation of British Industry (CBI) said on Monday the country’s economic recovery from the winter lockdown was being undercut by a shortage of skills in key positions, with increasing risks that the problem would continue for some time.

Since Covid-19 restrictions began to ease earlier this year, companies have complained of a lack of workers especially in hospitality, food processing and logistics which has resulted in gaps on supermarket shelves and restaurant closures.

A shortage of truck drivers has also forced some companies to offer signing-on and retention bonuses of up to 5,000 pounds ($6,900), and according to official data, there is a record number of job vacancies.

“Standing firm and waiting for shortages to solve themselves is not the way to run an economy,” said the CBI director general, Tony Danker. “We need to simultaneously address short-term economic needs and long-term economic reform.”

Certain occupations such as drivers, welders, butchers and bricklayers should be classed as shortage occupations for immigration purposes, the CBI said.

This would make easier access to visas possible and the employers sponsoring them would be able to pay salaries below thresholds for migrant workers under the UK’s new migration system.

The government has urged employers to train more Britons to fill their vacancies but the CBI argued that would take up to two years.

Britain needs around 100,000 more lorry drivers, according to the Road Haulage Association, which projects that it will take at least 18 months to train enough people to fill the gaps.

“A refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating,” said Danker.

“Businesses are already spending significant amounts on training, but that takes time to yield results, and some members suggest it could take two years rather than a couple of months for labor shortages to be fully eliminated.”

The pandemic and uncertainty about precise immigration rules had made it difficult to prepare for the end of free movement for most EU workers on Jan. 1 of this year, it said.

"The government promised an immigration system that would focus on the skills we need rather than unrestrained access to overseas labor. Yet here we have obvious and short-term skilled need but a system that can't seem to respond," Danker said.

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