Calls to change UK immigration policy to address labour crisis

The Chartered Institute of Personnel and Development (CIPD) is calling for short-term changes to the UK’s immigration policy to address the current labour crisis, warning that the immediate skills shortages could undermine the government’s plans to create a high-wage, high-skill economy. It has also called for the apprenticeship levy to be reformed into a more flexible training levy, as well as a £60m-a-year investment to improve business support for SMEs on issues including people management and skills development.

This has arisen following the release of data showing that sectors including hospitality, health and social care and manufacturing are all facing challenges with hard-to-fill vacancies and require “urgent intervention”.

A poll of 2,000 employers found that there is a spike in labour shortages in these key sectors. The number of firms reporting hard-to-fill vacancies in the hospitality, arts and recreation sector increased to 51% this year, compared to just 12% in 2020. Similarly, 49% of firms in the health and social care sector, and 47% of manufacturing firms, also reported hard-to-fill vacancies.

The CIPD argue that there is a strong case for an immediate immigration safety valve to address the rising labour supply challenges some employers are facing. Brexit has resulted in a huge portion of the EU population leaving the UK, which means that industries such as hospitality and transport have suffered.  With the added pressure of the pandemic, the talent pool has shortened and the knock-on effect has been felt by many industries.