UK worker shortfall due to Brexit curbs estimated at 330,000

The post-Brexit UK economy is facing a shortfall of more than 300,000 workers as the result of ending free movement of labour with the EU, according to a new estimate by leading researchers. The joint assessment from the UK in a Changing Europe and the Centre for European Reform think-tanks said that the ending of free movement was constricting the UK economy and “contributing significantly” to labour shortages in lower-skilled sectors, including logistics, construction and hospitality.

...The research assessed the shortfall in workers by using data in the annual population survey to compare actual numbers of workers from the EU and the rest of the world against an estimate of the immigrant labour force had the UK not ended free movement. By June 2022 they found a net loss of workers equivalent to 1 per cent of the UK workforce — about 330,000.

However, certain lower-wage sectors were disproportionately hit, with “transportation and storage” seeing a shortfall of 128,000, or 8 per cent of total number of workers in that sector. For “accommodation and food” the figure was 4 per cent; while for “wholesale and retail” it was 3 per cent.

Co-author John Springford, deputy director of the Centre for European Reform, said the reduction in labour supply would constrict the economy. “Employers will respond with some combination of higher wages and prices, and less output, especially in work that is hard to automate.”