Brexit migrant shortage will hit Scottish employers hard

4 July 2019

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The longer the uncertainty over Brexit continues, the more evidence emerges that the shaping of Scotland’s future may be less a matter of personal politics and more about economic necessity.

At the centre of the argument is the question of migration and the ability of companies north of the border to recruit the right people, and in sufficient number, to survive and grow.

A report published this week by the influential Fraser of Allander Institute warned of the ‘serious implications’ for the economy if Brexit makes migration to Scotland more difficult.

Brexit was supposed to be about the repatriation of sovereignty and ensuring decision making in whatever form, is democratic and more responsive to the needs of the UK economy.

Using taxes raised in Britain to subsidise Italian olive growers is great for the olive growers – and arguably good for UK consumers who like olives – but not so good for British companies and individuals who pay their taxes, so the argument goes.

Most people, including in Scotland, may have some sympathy for that view but they’re less likely to agree with perhaps the most widely cited argument for quitting the EU; that migration has had a negative impact on our economy and our way of life.

A desire to stem the unchecked arrival of immigrants, mostly from eastern Europe, was arguably what motivated most voters south of the border to tick the Leave box in the 2016 referendum.

The same sentiment never existed to the same extent in Scotland whose economy, until EU enlargement, was suffering from an historic and unstoppable depopulation.

Prior to the arrival of large numbers of EU workers from 2004 onwards, successive Scottish governments had warned of the need to attract migrant labour to ensure the survival of several key industries and communities, particularly in rural and remote areas.

The impact of the arrival of Poles, Slovaks and Romanians on the catering, tourism, agriculture, fish processing, construction, health and care sectors and many more, has been overwhelmingly positive, particularly for employers who rely on a plentiful supply of flexible labour.

Other industries including IT, engineering, electronics, digital and creative have benefitted from the arrival of Spaniards, French and Germans among others.

Turning off the migrant labour tap, as Brexit supporters will demand following the UK’s departure, will doubtless satisfy those who have ever had to wait in line behind a Pole in a GP surgery queue or who were denied a local school place for their children because a Romanian family got there first, but those anecdotes were rarely, if ever, voiced north of the border.  

Irrespective of how we voted, many Scots might ask themselves why we should trade membership of a trading bloc that has served our needs so well for an arrangement that will manifestly fail us.

Graeme Roy, director of the Fraser of Allander Institute, said: “Much of the Brexit debate has focussed upon the potential dislocation of trade patterns. But arguably an even greater challenge, particularly over the longer term, are the implications for Scotland’s population.

“Our analysis shows that a significant amount of the long-term growth gap between Scotland and the rest of the UK can be explained by differences in population growth.”

He warned: “Should Brexit make migration to Scotland more difficult, or less attractive, then this could have serious implications for key sectors and the economy at large.”

Roy’s sentiments are underlined by another report, by the Scottish Chambers of Commerce, which warns that the Scottish economy is ‘running on fumes’ because of the protracted uncertainty over Brexit.

Most firms are continuing to see cost rises because of skills shortages and sterling weakness caused by the Brexit vote three years ago, which has pushed up the price of raw materials.

The Chambers’ latest Quarterly Economic Indicator, refers to the ‘chaos’ caused by Brexit and ‘dithering’ by the UK Government which has imposed a ‘severe burden’ on its members who are ‘crying out for the return of some sanity as they undertake the important role of creating jobs and paying taxes’.

“Scottish businesses need to see steps being taken to avoid a disorderly Brexit and a responsible consensus reached as soon as possible on the Brexit process with the European Union,” the report said.

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