A total of 381,459 people have been given the right to work in the UK in the last year, the highest number since records began and more than double the last comparable figure, from 2019.
So why is the UK economy still struggling from a lack of people able to fill jobs?
Unemployment is at record lows but the number of unfilled job vacancies has never been higher.
The Office for Budget Responsibility (OBR) says there would be 1.2 million more people in the UK workforce today if it had grown over the past 18 months at the same rate as it did from 2010 to 2020. Where are all the missing workers?
One theory is that the high number of work visas being issued is because workers from EU countries who already lived in the UK before Brexit had to apply for a visa to remain in their job.
That would mean these record numbers are not new people to be added to the workforce, they are the same people with a new work-status category. The theory doesn’t stack up though.
There was an alternative “right to remain” pathway for these workers during the Brexit transition period, before the UK formally left the EU, which is separate from a working visa.
And even since that route expired, the recent rise has been driven mostly by workers from outside the EU.
These immigration numbers are a legitimate record high rather than a statistical quirk, but they are being outstripped by the record number of people leaving the UK workforce.
There are an extra 393,000 people registered as long-term sick compared with March 2020. There are 318,000 more students, put off from joining the workforce due to poor job prospects during the pandemic or delayed higher education opportunities.
In total, there are 820,000 more unemployed people of working age who don’t want a job than there were in March 2020.
That’s almost 200,000 more than the 631,058 working visas that have been given to workers joining the UK from abroad in the same time period – many of which were temporary anyway.
And that’s before we get into the 25,000 excess deaths among working-age people during the pandemic, or the net loss of about 50,000 EU nationals, the vast majority of whom will have been in work as well.
They aren’t included on the chart below as the exact number in this category isn’t clear.
With an expanding overall population, it wouldn’t be enough for the numbers in and out of the workforce to even just reach parity with each other. Demand also grows.
It’s not an exact science as to exactly how much impact each job vacancy has on overall economic growth and vacancies in different roles will contribute to a higher or lesser degree depending on their productivity.
However, the OBR says higher than expected immigration was the only thing that made any upwards influence between their March growth forecast and the one last week that followed details of Chancellor Jeremy Hunt’s economic plan.
Madeleine Sumption, Director of the Migration Observatory at the University of Oxford, said: “Having a bigger working-age population is pretty helpful [for GDP].
“You effectively have people coming in, you don’t pay to support them while they’re children or young adults or for their schooling, and they will be contributing to the workforce immediately.”
What is the government doing to address the gap?
The 2019 manifesto had a pledge that didn’t mention numbers, just that an “Australian-style points system” would be introduced to give the UK more control over who comes in.
That system was introduced on 1 January 2021. Although it signalled a distinction from the freedom of movement for EU citizens during Britain’s time in the Union, many of the requirements were loosened at the same time.
Alp Mehmet, Chairman of Migration Watch UK, said: “Abandoning key controls on work immigration – including by removing the cap on work permits and scrapping the requirement to advertise job vacancies in the UK first – have all contributed to the number of work visas issued skyrocketing.”
According to the government’s own definition, most of the people who have received visas under the new system have been “skilled workers”.
There have been almost 170,000 visas issued to skilled workers in the health and social care sector, plus 140,000 other skilled workers, out of the 550,498 visas issued in total under the new regime.
The balance of where the vacancies lie does not always match up with where people are eligible to apply for visas, however.
For example, the accommodation and food service industry is most short-staffed at the moment, with 6.9% of all roles unfilled in October 2022, equivalent to 152,000 jobs.
There have been just 7,550 visa applications for jobs in the industry under the new scheme. There aren’t figures on how many of those were successful – but even if it was all of them, that would be equivalent to just 5% of the shortfall.
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