Brexit and Jobs: What Does the UK Job Market Look like after Leaving EU?
By Amar Ali, Immigration Solicitor
Brexit was always expected to have an impact on the jobs market. If you were in the ‘leave camp’, you may have concluded that there would be more employment opportunities following our full departure from the EU. If you were in the ‘remain camp’, you may have expected a tougher jobs market post-Brexit. In the event of our full departure from the EU at the end of 2021, other events have conspired to mask the true impact of Brexit on employment; namely, COVID-19. In this article, we will assess the state of the UK job market after leaving the EU, including the current rate of unemployment, the sectors which have been most impacted, and those in which there are more opportunities now available.
Unemployment Rate Now At 5%
According to official government figures from the Office for National Statistics (ONS), between February and December 2020, there were 828,000 fewer workers in the UK. In the last reporting quarter, the jobless rate increased by 0.6% compared to the previous quarter, equating to a loss of 202,000 jobs. As a result, it is now believed that the UK unemployment rate is now at 5%. As a point of reference, the unemployment rate was at 3.8% in October 2019. That said, we are a long way off the rates of unemployment seen after the financial crisis, which saw the rate climb to 8% in early 2010, and 8.5% at the end of 2011. Given that the upward trend of unemployment lasted for around three years after the 2008 financial crash, it may continue to climb for some time yet.
The ONS’s deputy chief executive, Sam Beckett, has confirmed that unemployment rates have not risen like this since the global financial crisis, however, she says that employment is still high relative to other countries. In part this may be due to the sheer volume of people who are furloughed, “We've currently got over 4.5 million people on the furlough scheme, so that does complicate the picture when you're trying to interpret what's going on in the labour market”. She also says that workers in the 16-24 age range are currently being hit the hardest. As such, the impact of Brexit on the jobs market is not only being masked by COVID-19, the impact of the pandemic is, itself, being masked by the furlough scheme.
Which Job Sectors Have Been Hit The Hardest?
According to the GMB union, between 2008 and 2018, nearly half a million manufacturing jobs were lost. The Bank of England ‘Agents' summary of business conditions - 2020 Q4’ report says that “the outlook remains negative, and further job cuts are expected in retail, hospitality and leisure, and construction once the Government’s Job Retention Scheme unwinds”. It will come as little surprise that one of the hardest-hit parts of our economy is the hospitality sector. While restaurants, cafes, and pubs have been allowed to trade at various times during the pandemic, all are now closed (apart from those serving takeaway food) to as a result of the latest lockdown. Manufacturing has also been hit hard, with 50,000 people losing jobs in this sector. It is important to bear in mind that manufacturing in the UK has been losing jobs at a high rate since 2008. Manufacturing employment is down for a number of reasons, including lower demand for aeroplanes and cars, both of which have impaired the market for steel (and hence steel production).
When it comes to the additional impact of Brexit, of concern is the vast volume of EU nationals who have already left the UK. A recent article in the Financial Times, entitled “Foreign workers flee UK as pandemic and Brexit bite”, highlighted the point that “an estimated 1.3m have gone home, with hospitality and retail the sectors most heavily affected”.
Are Any Job Sectors Seeing An Increase In Demand?
The Bank of England report highlights a subdued job market in some sectors, but they also state, “Nonetheless, there were a few reports of companies increasing staff numbers in certain sectors, such as pharmaceuticals, IT and professional services”.
In addition to the pharmaceuticals, IT, and professional services sectors, there is also a clear demand for skills in the health and social care sectors, both of which are experiencing unprecedented pressure due to COVID-19. This has been further exacerbated by recent news that thousands of EU workers in the UK are unaware they need to apply under the EU Settlement Scheme before the end of June 2021, meaning that the care sector is deeply worried it may be left short of staff. Karolina Gerlich, executive director of the Care Workers’ Charity, explained her concern; “This kind of thing isn’t at the forefront of people’s minds. Care workers are working beyond their capacity all the time at the moment because there’s just so much to do. Brexit on top of Covid is already very bad timing, so capacity is particularly low at the moment”. Caroline Abrahams, charity director at Age UK, added to this, explaining, “Our care system was in bad shape before the pandemic arrived and has taken a terrible hammering over the last ten months. And with more than a hundred thousand vacancies in the care workforce, the contributions of European care workers are vital – we need every good care professional we can get”.
Final Words
While the jobs market may seem bleak, there are still many opportunities. Indeed, there is now an increased level of optimism with our eventual departure from the EU and the vaccine rollout underway. It will be more important than ever to look for sectors that are seeing increased and sustained demand. For those workers who are prepared to be flexible and willing to retrain to work in a new field, many well paid and secure jobs will still be available.
