Foreign worker exodus sparks concern among UK employers

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According to recent research, foreign workers are leaving the UK at the fastest rate since World War II, adding to the strain on the economy, which has been badly affected by the coronavirus pandemic and Brexit. The research shows that London alone has lost 700,000 people over the past year.


The consequences of the exodus will prove challenging for the Treasury and landlords while harming Britain’s economic recovery amid what has been described as ‘the worst slump in three centuries.’

Jonathan Portes, a King’s College London economics professor who estimates well over 1 million foreign-born workers may have left, said: “The risk is that people don’t come back, so we have skill and labour shortages, and we lose some output, growth and tax revenue permanently.”

“Given how migration has driven economic growth, particularly in London, that could be bad news,” Mr Portes added.


Budget announcement

Rishi Sunak, the UK Chancellor of the Exchequer and the Office for Budget Responsibility, is expected to tackle the challenges facing Britain’s economy with a series of measures set to be launched following his Budget announcement on 3 March. For the Treasury, fewer migrants will mean less economic output and tax revenue.

This could severely affect government plans to reduce the huge debts it has accumulated to help people and businesses stay afloat during the COVID-19 pandemic.

Once such plan expected to be announced is the launch of a new, fast-track UK tech visa to entice foreign fintech workers to Britain to protect the country’s £7 billion fintech sector.


Reverse immigration stance

Efforts to encourage immigration to the UK would represent a significant reverse on the government’s stance over the last decade, which has sought to limit the flow of migrants to Britain. If the UK doesn’t act now, the country’s demographic problem – similar to those seen in Germany and Japan – could be exacerbated as the population ages.

Should the UK be faced with a continued decline in migration numbers of around 100,000 a year, Britain could see a 1% drop in output after five years. This would increase the UK’s budget deficit by 0.7% of gross domestic product (GDP).

However, the loss of foreign workers could represent an opportunity for the domestic workforce in the short term. With UK unemployment levels rising, as the economy slowly begins to reopen, sectors that have been closed for months – such as hospitality – are likely to be on the lookout for new staff.

With post-Brexit UK immigration rules making it harder to recruit so-called ‘low-skilled’ workers from overseas, employers will be forced to turn to the domestic workforce to fill vacancies.

Director at the Migration Observatory research unit at the University of Oxford and government adviser, Maggie Sumpton, said: “Many jobs won’t be eligible for long-term work visas. The government has made it clear it doesn't want to allow a lot of exceptions.”


Exact number of leavers unknown

While foreign workers are seemingly leaving the UK in droves, experts say that it’s impossible to give an exact number because the pandemic has limited government data collection. 

Researchers rely heavily on the Labour Force Survey, which suggests that the UK’s foreign-born population has shrunk by nearly 900,000 to 8.3 million in the year through the third quarter.

However, some analysts say that the picture could actually be far bleaker. In a recent blog written by Portes and co-author Michael O'Connor for the government-funded Economic Statistics Centre of Excellence, the pair said the figure could be closer to 1.3 million. According to Portes and O’Connor, London alone may have lost 8% of its population. can help with Sponsor Licences

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