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The UK’s post-Brexit immigration system is a “barrier” to hiring overseas workers and should be relaxed in order to tackle wide-scale staff shortages reported across the country, Britain’s biggest business group has said.Lord Bilimoria, president of the Confederation of British Industry (CBI), warned Brexit and Covid had triggered a “perfect storm” with firms struggling to recruit in many sectors of the economy.The CBI called on the government to “immediately update the shortage occupations lists” for roles including butchers, bricklayers and welders.The list identifies occupations for which there are not enough UK workers with the correct skills. If an occupation is on the list, employers can fill vacancies by recruiting staff from abroad more easily. For occupations that are not on the list, employers must show that they have gone through procedures to prove that UK nationals and resident workers have been given enough opportunity to apply before the job is offered to overseas candidates. Visa fees are also higher.Many businesses – including those in hospitality and retail – have reported a shortage of workers blamed in part on workers leaving the UK during the pandemic.But the end to freedom of movement after Brexit has also severed the flow of new European workers who often took low-paid roles, which businesses are now struggling to fill. NHS leaders have previously warned that the government’s post-Brexit points-based immigration system risks creating an “alarming” shortfall in social care workers in the coming years.In a speech to the Recruitment and Employment Confederation’s (REC) annual conference, Lord Bilimoria – founder of Cobra Beer – said: “We’ve got a perfect storm of factors coalescing. During the pandemic, many workers from overseas left the UK to return home – hitting the UK’s hospitality, logistics, and food processing industries particularly hard.“The UK’s immigration system is also a barrier to hiring people from overseas to replace those who may have left.”He added: “We need government to immediately update the ‘Shortage Occupation List’.“Last year – in September 2020 – the Migration Advisory Committee recommended that we add certain roles to that list. Butchers, bricklayers, and welders for example. “Today, almost a year on, we worry those are exactly the same sectors facing shortages now. “Businesses would also welcome a commitment to review the list annually, to keep it responsive to the ebb and flow of skill demands across the whole of the UK’s economy“Where there are clear, evidenced labour shortages, businesses should be able to hire from overseas. An evolving Shortage Occupations List could help.”A report by jobs site Indeed earlier this month suggested the number of EU citizens searching for work in the UK had slumped by 36 per cent since Brexit, with interest in low-paid roles in hospitality and retail falling the most, by 41 per cent from 2019 levels.In total, 1.3 million non-UK workers have left the country since late 2019. More

The pro-Brexit boss of pub chain JD Wetherspoon has urged the government to increase migration from the EU to deal with a shortage of workers in the hospitality sector.Tim Martin, who campaigned for a hard Brexit, including leaving the single market and the end of freedom of movement which came with it, urged Boris Johnson to consider a new, “reasonably liberal” visa scheme to encourage foreign workers to relocate to the UK.He suggested countries close to Britain could be given preferential treatment – seemingly at odds with the argument laid out by Brexiteers that leaving the EU would allow the UK to treat all nationalities equally. Mr Martin told The Daily Telegraph: “The UK has a low birth rate. A reasonably liberal immigration system controlled by those we have elected, as distinct from the EU system, would be a plus for the economy and the country. > > To sign up to our free daily politics newsletters click here“America, Australia and Singapore have benefitted for many decades from this approach. Immigration combined with democracy works.”The Wetherspoon chairman had previously warned that remaining in the EU would lead to “significant adverse economic consequences” and labelled those warning of the economic damage that cutting ties with our biggest and closest trading partner would bring as “doomsters”.‘Question Time’ member accuses Tim Martin of supporting Brexit to ‘line his own pockets’Arguing for a no-deal Brexit in 2019, Mr Martin said: “I have argued that the UK – and therefore Wetherspoon – will benefit from a free-trade approach, by avoiding a ‘deal’ which involves the payment of £39bn to the EU.” He also cut the price of some drinks by 20p in a stunt to show how he believed Brexit would lower his costs.However, as a result of Brexit and the pandemic, much of the UK’s hospitality industry is now struggling to fill thousands of vacant roles.Mr Martin’s comments triggered an angry response from many of those who had argued against Brexit. Campaigner Femi Oluwole wrote: “I really hope Tim Martin never runs into Tim Martin. He’s gonna be so angry!”Former Plaid Cymru leader Leanne Wood said: “I remember disagreeing with Tim Martin on @bbcquestiontime about this, back in 2016. He was arguing the opposite position to this then. Too late mate.”The number of job postings in the bar, restaurant and pub sector has shot up by 46 per cent since indoor trading was allowed to resume in England on 17 May, according to the consulting services firm RSM.Michael Kill, chief executive of the Night Time Industries Association (NTIA), said both Brexit and the loss of staff during the long pandemic had left many firms struggling with their reopening plans.“There are severe staffing shortages,” said Mr Kill. “A lot of workers are from Europe, so Brexit has had an impact, and there is the furlough hangover, where a lot of people have now got other jobs to keep themselves going and are not coming back.”A report released at the end of April by Fitch Ratings, one of the Big Three credit rating agencies, said staff shortages were largely down to “EU nationals who have left the country following Brexit and employees who have switched sectors during the pandemic”.The agency said it also expected hospitality companies such as pubs, hotels and restaurants “to incur the additional costs of hiring and training new employees … putting pressure on their margins”.“Before Brexit, EU nationals made up between 12 per cent and 24 per cent of the total workforce in the UK hospitality industry, according to KPMG,” the report said. “Many of them left the country during the lockdowns. EU nationals now have to obtain a visa in order to enter the country to work, which entails securing a job offer that meets minimum salary levels, among other requirements.”The Fitch Ratings report added that hospitality businesses “may face increased salary requirements, for example in order to attract EU nationals, particularly during high summer and early autumn seasons, or to hire skilled employees to train workers with no prior experience.” More

The UK’s debt has reached a new high as government borrowing hit £19.1bn last month as it continues to battle the coronavirus pandemic and the economic fallout of lockdown.The Office for National Statistics (ONS) said the public sector had borrowed more last month than during any other February since records began in 1993.The debt owed by public bodies has increased by £333bn since the start of April, the first month of full lockdown in the UK.It brings the total debt to £2.131 trillion, the ONS said.Central government bodies are believed to have spent around £72.6bn running their day-to-day activities in February, a rise of £14.2bn compared with February 2020. The figure includes £3.9bn spent on supporting jobs through Covid-19.The chancellor of the exchequer, Rishi Sunak, pledged early on in the pandemic to provide whatever support businesses needed to help them through the government-imposed lockdowns.Read more:Mr Sunak said: “Coronavirus has caused one of the largest economic shocks this country has ever faced, which is why we responded with our £352bn package of support to protect lives and livelihoods.“This was the fiscally responsible thing to do and the best way to support the public finances in the medium-term.“But I have always said that we should look to return the public finances to a more sustainable path once the economy has recovered and at the Budget I set out how we will begin to do just that, providing families and businesses with certainty.”The government has backed more than £70bn through three loan schemes, and also paid 80 per cent of salaries to around 10 million workers who were furloughed.The government has relied heavily on borrowing to be able to fund this spending as tax receipts have also gone down during the period.However, Mr Sunak has signalled that tax rises are likely in the coming years, already announcing a plan to increase corporation tax from 19 per cent to 25 per cent for large companies by 2023. More

Several Spar-branded products lines are on sale in Sainsbury’s shops under a “temporary” agreement to avoid empty shelves from 1 January.Fresh foods including ready meals, meat, dairy products and desserts are affected.A member of staff told the Belfast News Letter that about 700 product lines had been lost due to Brexit.The changes are a consequence of the new customs declarations and additional regulatory checks required on goods moving from Great Britain to Northern Ireland after the UK left the single market and customs union at 11pm on New Year’s Eve.Despite Boris Johnson’s insistence that there would be no border down the Irish Sea, firms have been left scrambling to ensure they can navigate the red tape imposed on shipments.Sainsbury’s said a “small number” of products were “temporarily unavailable for our customers in Northern Ireland while border arrangements are confirmed”. A spokesperson said: “We were prepared for this and so our customers will find a wide range of alternative products in our stores in the meantime and we are working hard to get back to our full, usual range soon.”Arlene Foster on the Irish sea borderThe supermarket giant has signed a contract with local supplier Hendersons, which produces Spar-branded lines. The Northern Ireland-based wholesaler said: “Over the last several months we have been contingency planning for Brexit to minimise any disruption to the food supply chain for our 470 stores across NI after 31st December 2020.“We can confirm that we have entered into a temporary supply agreement with J. Sainsbury supermarkets that will see both parties working together to ensure availability for our customers.”Yodel, one of the UK’s largest delivery firms has, told customers they would have to pay additional charges for shipments to Northern Ireland because of the extra bureaucracy. Another delivery company, DPD, announced before Christmas it would suspend deliveries in the country.Northern Irish economy minister Dianne Dodds has called for urgent action to be taken over the disruption of delivery of goods.She has written to Michael Gove, the Cabinet Office secretary, over concerns that retailers based in Great Britain are cutting their services to Northern Ireland because of a lack of clear guidance.The letter from Ms Dodds said: “Over the last number of weeks we have seen numerous GB-based retailers withdraw from offering deliveries to Northern Ireland due to the lack of guidance.”On regulatory issues we have seen retailers of plants, food and drink ceasing to offer products for delivery in Northern Ireland due to increased costs.“The UK government has announced three-month grace period during which online retailers in Britain will not have to make customs declarations when sending parcels valued below £135 to Northern Ireland customers.However, Ms Dodds noted is unclear what will happen when that period ends on 1 April. More

The Department for International Trade has announced that the UK will unilaterally drop tariffs on US goods related to the long-standing Airbus-Boeing state aid dispute from next year when the UK leaves the European Union’s customs union.The move is being seen by some as an attempt by the UK to curry favour with the incoming Biden administration and encourage Washington to look more kindly on proposals for an US-UK post-Brexit trade deal, whose prospects have been thrown into doubt by Joe Biden’s election victory.The EU imposed retaliatory tariffs on $4bn worth of US-made products, ranging from molasses to orange juice, in November, after being authorised to do so by the World Trade Organisation (WTO).This included the UK, as the country remains, until 31 December, an effective member of the EU customs union. But the Trade Department announced on Tuesday night that when the UK exists the post-Brexit transition in less than 24 days and gains full control over UK tariff policy, it will remove these import levies.The move might prove controversial because, as part of the same dispute (and also sanctioned by the WTO) the US has hit $7.5bn of EU goods with tariffs, including a 15 per cent levy on imports of Airbus aircraft.Airbus employs some 6,000 workers at Broughton in Wales, where the wings of its line of aircrafts are assembled.  The European aviation giant company announced plans to make 1,700 redundancies in its UK operations this year because of the losses caused by a slump in air travel this year.The Trade Department said, however, it would roll over EU tariffs on US steel next year, put in place in retaliation for Donald Trump’s import tariffs on European steel, including metal manufactured in Britain.And it added that it “reserves the right” to re-impose the Airbus-related tariffs at any point unless the US moves towards a settlement that lifts retaliatory tariffs on UK exports.
The Trade Secretary, Liz Truss, said the move on Airbus-related tariffs would show the US “we are serious about ending a dispute that benefits neither country”.
“Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this,” she said.
The Trump administration had been keen on an early US-UK trade deal, but in an interview with The New York Times earlier this month Joe Biden said: “I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers”.Sam Lowe of the Centre for European Reform said de-escalating trade tensions with the US was in the UK’s interests, although he felt it wasn’t likely to be a game changer over the timing of a US-UK trade deal.
If the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interestSam Lowe, Centre for European Reform“While a trade agreement with a Biden administration is unlikely to arise any time soon, if the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interest, particularly the British producers who are currently facing US tariffs as a result,” he said.
Holger Hestermeyer of King’s College London, however, suggested the UK move could be primarily motivated by legal considerations.“The UK does not have a sufficiently solid legal basis to impose tariffs related to the Boeing dispute, as the EU and not the UK has been granted authorisation to take countermeasures,” he said.“The situation is different with regard to steel as the legal basis there is entirely different and the UK can rely on the same construct as the EU.”The EU and the US have been in a 16-year battle over claims that they have each given illicit state aid to their respective leading aircraft manufacturers.
The World Trade Organisation last year effectively ruled that both had been guilty of the practice, allowing each side to impose tariffs on the other in retaliation, with the US going first. The US’s tariffs hit Gouda cheese, French wine and Scotch single-malt whisky.The EU had hoped that it could negotiate a settlement with the US whereby it would not have to impose its own tariffs, but it went ahead with the import levies in November, after finding the Trump administration was refusing to engage. More

The UK’s ravaged public finances are unlikely to be brought into balance before the end of the decade at the earliest thanks to the lasting impact of the coronavirus pandemic, according to the head of the Institute for Fiscal Studies (IFS).In his Conservative Party speech in October the Chancellor Rishi Sunak said he had a “sacred responsibility” to leave the public finances strong and that “this Conservative government will always balance the books”.Yet, ahead of Mr Sunak’s Spending Review next Wednesday, Paul Johnson, the head of the IFS, told Econ Films’ CoronaNomics show, that this was a distant prospect indeed.“[It] was a very, very strange thing to say because I don’t think there’s any possibility of the books being balanced this decade, if not for longer,” said Mr Johnson.
The government has borrowed £215bn since April, according to the Office for National Statistics, up from £46bn in the same period in 2019.  The Office for Budget Responsibility, the Treasury’s independent forecaster, estimated in August (before the furlough extension was announced) that total borrowing for the full 2020-21 financial year would come in at around £372bn, around 19 per cent of UK GDP.This would be the biggest annual deficit in peacetime.  Most of that borrowing is expected to disappear automatically as the economy ultimately recovers and the emergency support for the economy, such as the furlough scheme, comes to end.But most forecasters, including the Bank of England, now expect the UK economy to be considerably smaller in the middle of the decade than was expected before the crisis, which will open up a “structural” deficit in the public finances, meaning a deficit that will not be automatically closed when the economy is running at normal speed.The size of that deficit will depend on the speed of the recovery and how much extra spending on health in the crisis becomes permanent, but in its “Green Budget” earlier this year the IFS laid out scenarios of public borrowing by 2024-2025, with the optimistic scenario showing a deficit of 3.5 per cent and the pessimistic scenario showing a deficit of  8.5 per cent.Many analysts are pencilling in a long-run structural deficit of around 2 per cent of GDP, or £40bn in today’s money. There has been speculation that Rishi Sunak is examining tax rises in anticipation of needing to take action to repair the public finances and there have been reports the Treasury plans to freeze the pay of non-health public sector employees in 2021-22 in the Spending Review.Yet Mr Johnson, in line with just about every independent economist, argues that the Treasury should not be implementing any tax rises or spending cuts until the economy has recovered, as such consolidation measures, at the moment, would merely make the country’s fiscal hole deeper.“There was some very odd briefing over the summer, where there was lots of press speculation about a budget in the Autumn announcing tax rises for next year, which were supposedly coming from the Treasury, though I find that very hard to believe,” Mr Johnson told CoronaNomics.“Clearly they should not have been – and I’m amazed that they were – talking about that kind of thing at that time. It was clearly an inappropriate moment to be doing that.” More

One of the Britain’s most well-known epidemiologists has said that he has not seen “convincing evidence” Rishi Sunak’s controversial meal subsidy scheme is responsible for the UK’s subsequent spike in Covid cases.The Chancellor’s Eat Out To Help Out (EOTHO) scheme offered subsidised meals in pubs and restaurants in the month of August and has been identified by some as a likely accelerant of the virus’s spread over the summer.
But Professor Neil Ferguson of Imperial College London said it was “probably misleading” to identify individual government policies as responsible for the second wave of cases that has hit the UK.“I haven’t seen any convincing evidence that Eat Out to Help Out made any appreciable difference to risk,” Professor Ferguson told Econ Films’ CoronaNomics show.“Undoubtedly reopening the economy, allowing people to go to restaurants and bars has contributed, as well as more general and more frequent mixing of people in society, to the growth of the epidemic we see here.”  “[But] the UK is not in a unique position. The whole of Europe is experiencing the same challenges right now so I think it’s very hard to attribute and probably misleading to attribute those risks to particular policies.”
The debate about the wisdom of the Chancellor’s policy – which subsidised 100 million meals over the summer – is heating up.  Some researchers initially found no clear association between cases and uptake of the scheme.But a new paper last week from Thiemo Fetzer of Warwick University’s Centre for Competitive Advantage in the Global Economy (CAGE) used an analysis of microdata on the number of restaurant visits and subsequent infections and also local rainfall patterns to suggest EOTHO had been responsible for up to 17 per cent of new infection clusters.Professor Tim Besley of the London School of Economics, who is leading a project, under the auspices of the Royal Society, to integrate epidemiological and economic modelling to give better policy advice to ministers, who was also speaking to CoronaNomics, said the jury was still out on the impact of the Chancellor’s policy.“Certainly some of my colleagues were sceptical right from the start about the policy given the economic benefit for the increase risk, but what I haven’t seen is any convincing analysis that it was a material factor in the pick of the disease in recent weeks,” he said.
Professor Ferguson’s team at Imperial put together a model in March which suggested the unmitigated the spread of the virus could cause 500,000 deaths in the UK. The results are credited with prompting the Government to impose the full lock down within days.Professor Ferguson stepped down from Sage, the government’s main scientific advisory group in May, after it emerged he had broken the lockdown rules himself. But he told CoronaNomics that he is still “involved in advising the UK government”. More