Labor crisis may last 2 years, says CBI

Brexit and pandemic-related staff shortages in the United Kingdom could last for two more years, a leading business group has warned.

In a report published on Monday, the Confederation of British Industry (CBI) said labor supply problems have left businesses battling shortages of haulage truck drivers, restaurant waiters and chefs, and construction site workers.

The CBI, which represents 190,000 companies with more than 7 million employees, blamed the shortages on the "perfect storm" of the COVID-19 pandemic and Brexit, which led the UK out of the European Union in January, 2020.

It said hundreds of thousands of overseas workers, who left Britain during the pandemic, have stayed abroad while others left in the wake of stricter immigration rules following Brexit.

The business lobby group has warned the effect was being felt across the economy from "entry level roles in hospitality to skilled jobs in engineering", the Financial Times noted.

Hotel owners have told the CBI executive they are having to limit the number of rooms available to book because they do not have enough housekeeping staff and can not get linen laundered, The Guardian noted.

The group said the crisis will damage the economic recovery from the pandemic and called on government ministers to act urgently to ease shortfalls in key areas such as distribution.

Ministers have so far refused to relax post-Brexit immigration rules and allow drivers from the EU back to resolve the distribution crisis.

Businesses have been told by government officials that they should use British workers, including those coming off the furlough job retention program, Sky News noted.

But CBI members have told its leadership that the end of the furlough program this month will not ease the worker shortage.

"Standing firm and waiting for shortages to solve themselves is not the way to run an economy," said the CBI director-general, Tony Danker, in the report. "We need to simultaneously address short-term economic needs and long-term economic reform."

Danker warned that more industries will soon be exposed to acute skills shortages, which may not be resolved until 2023.

"The government's ambition that the UK economy should become more high-skilled and productive is right, but implying that this can be achieved overnight is simply wrong, and a refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.

"Businesses are already spending significant amounts on training, but that takes time to yield results, and some members suggest it could take two years rather than a couple of months for labor shortages to be fully eliminated."

A government spokesman, quoted by Metro News, said the government is closely monitoring labor supply and are "working with sector leaders to understand how we can best ease particular pinch points".