The downward trend could affect Britain’s long-term growth potential
Tags: Home Office, Ernst & Young Item Club, Phil Woolas
28th August 2009: Recession continues to take its toll. Home Office figures reveal the downward trend continues, as the number of Eastern Europeans applying to work in Britain continues to take a dip in the second quarter of 2009. It is apprehended this could affect Britain’s long-term growth potential.
Available information suggests 24,210 people applied for the government’s Worker Registration Scheme between April and June. It was down 44.7 percent from a year ago.
It is believed people have been postponing their plans of migrating ever since the companies started to cut down on the number of jobs, with the economy taking a direct hit from global recession.
Explaining the trend, the economists insist the pull of taking up an assignment in the UK has been affected by the fall in sterling and employment opportunities in the UK.
The findings come at a time when it is clear that Britain’s recovery from the recession is likely to be hit by a fall in the number of immigrant workers. In fact, a group of economic forecasters only recently held the reduction in their numbers threatened to create skills shortages and hold back the recovery.
Reports also suggest the impact of shortage of qualified staff will reflect itself not only on gross domestic product growth, but also threaten to obstruct efforts to rebalance the economy, with more manufacturing and less financial and other services.
In fact, the Ernst & Young Item Club, with companies from a range of industry sectors as members, only recently asserted the economy’s dependence on imported labour was underlined by Financial Times’ research showing foreign-born workers were proving more successful at holding on to jobs in the recession than their British-born counterparts.
By now it also is apparent the migrants are needed to help resolve the long-term problems of skills shortages and an ageing society.
It is also a known fact that migrant workers coming to Britain in recent years have helped keep wage costs under control. They have also contributed to the healthy growth and low inflation before the onset of the financial crisis some two years ago.
A fall in the supply of cheap labour now is apprehended to put brakes on the economy’s ability to grow without generating too much inflation.
Statistics also reveal net migration into Britain in 2008 fell to its lowest since 2004, when the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia joined the European Union.
The net migration dipped from 209,000 in 2007 to 118,000 in 2008.
Responding to the figures, Border and Immigration Minister Phil Woolas said: ‘The fall in net-migration is further proof that migrants come to the UK for short periods of time, work, contribute to the economy and then return home. Our new flexible points based system gives us greater control on those coming to work or study from outside Europe, ensuring that only those that Britain need can come.
‘Britain’s borders are stronger than ever before. Our border controls in northern France are stopping record numbers of migrants reaching our shores – 28,000 in 2008.
‘We are rolling out ID cards to foreign nationals, we have introduced civil penalties for those employing illegal workers and from the end of next year our electronic border system will monitor 95 per cent of journeys in and out of the UK’.
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