Article: Dawning reality of a hard Brexit

Talent Acquisition

Dawning reality of a hard Brexit

UK negotiates for its future with EU. Read on to know how the looming Brexit is affecting demand and supply of labor in the UK.
Dawning reality of a hard Brexit

When the British voted to Leave the European Union, critics and economics had both predicted that the development would prove to be negative, both in the long and short run, for UK.

Recently, news has been pouring out about the various industries and sectors in the British economy stating that they are undergoing a shortage of labor. However, the complete process of Great Britain divorcing the European Union would take two years, as is stated in the Article 50 of the European Union constitution.

The Article 50

The Article 50 is part of the agreement signed between the European Union and its member states during the Treaty of Lisbon, which allows any of the members to exit the union. It became a law in the year 2009.

According to it, any nation can exclude itself from EU, but it must notify the same to the union, also negotiate its exit with EU, and that there are two years to reach an agreement with EU with regards to the new status quo. The latter can also be extended if agreed upon by others. The process for Great Britain was started by the current Prime Minister, Theresa May on 29th March 2017 and it would end on 29th March 2019.

For a few months, there had also been rumors about holding a second referendum, but the possibility of the same was ruled out by Mayer as they needed to respect the decision taken by the people of Great Britain. 

News reports also suggest that Mayer who took over as the Prime Minister after the stepping down of David Cameron is currently leading the negotiations with the European Union. While both Cameron and Mayer had opposed the separation, Cameron had been at the forefront of the ‘Remain’ campaign, while Mayer had mostly kept her silence.

The negotiations apart from determining the trade agreements between Great Britain and the members of the European Union would also have a huge impact on the future of British expats in EU member states and the European immigrant in the UK. The process has become especially complicated for the group of island nations because Northern Ireland has voted to remain with EU.

Purpose of existence of European Union

Currently, the European Union ensures that its member states enjoy a single free market, a reality which was institutional in the inception of the European Union. The consequence of the same for the member nations is a shared decision-making process, which many of the proponents of the leave campaign had called out to be extremely confining and restricting for UK. This apart from the huge cost, which they said is given to the EU as memberships, and by far completely overshadows the benefits that a free market has to offer. This was, obviously challenged, by the former Prime Minister David Cameron who said that access to the unified market is a huge advantage for the nation. Apart from this, UK is also extremely dependent on the labor influx especially from Eastern Europe. Apparently, the short term benefits which the supporters of Brexit have been touting is the increased pace with which placements are taking place. But this is despite the demand continually rising in the wake of a labor shortage in the country.

Future of existing immigrants in the UK

Interestingly, the Mayer government has plans of providing the ‘settled now’ status to the European immigrants who have been residing in the country for five years or more. Though, because of the current prevalent ambiguity of the status of the immigrants, and the fact the government has no plans to offer a permanent residence to them simply on the criteria of them having lived in the country for five years, many of the immigrants are leaving Britain, and many who would have returned back to the nation-state are not returning back. The result is the decrease in the net immigration, which only future would tell, if it bodes well for the country or not.

Labor shortages being reported

For now, as reports suggest, there could be a critical shortage of doctors for animal healthcare as currently, 9 out of the ten practicing doctors part of the government run medical institutions are European immigrants. Though, with in case of the nurses, the problem has already become extremely acute. Most of the nurses in the UK are immigrants from Eastern Europe and many of them have not returned back to the nation, while there has also been a drop in the number of inquiries that Britain has received with regards to employment from the aspiring European immigrants. 

Brexit, which was passed an year from now, did saw an exit of nurses from the country. But the shortage has only increased. The critics of the UK’s membership of the EU had stated that the money that they would save after the exit could actually be utilized in sustaining the NHS infrastructure. As of now, there does not seem to be any plans put into place to see this through.

Apart from the healthcare industry, the other sector which has been negatively hit because of the drop in immigrants from Eastern Europe is agriculture. The problem is the acute shortage of the temporary farm labor which mostly is responsible for activities like picking of fruits and vegetables. This, as analysts point out is leading to rise in the increase in retail inflation in the country. Though, and very interestingly, the consumer confidence has not yet been affected by the rise in the inflation in the country; retail and otherwise. And this is also being displayed as a positive sign by the supporters of Brexit, even though analysts state that the consumer confidence might dwindle because of the rising inflation and the drop in income (which for now has not been conclusively attributed to Brexit), is a reality that the consumers will be facing the future. Adding on to all of this is the continuing shortage of labor in the various sectors which would also directly impact the common man in the UK, as is currently being seen as the slowdown in the building of houses.

The future of UK will depend upon the agreement between Great Britain and the European Union, but what would be most interesting to watch out is how the UK would be dealing with the shortage of all kinds of labor: unskilled, semi-skilled and skilled. Though, one of the objectives, as has been explained as the reason for people voting to leave is the cutting down of immigration from Europe (and also elsewhere) in the United Kingdom, UK’s dependence on external labor is too huge to simply ignore.

How would the future unfold?

In the future, would UK join back the EU? This would not be easy as this would require the all the member states agreeing to its membership to the European Union. Or, would UK separately sign immigration agreements with EU members (and other nations) to handle its labor shortage in the future?

Whatever it could be, for now, it has some hard realities to negotiate with to safeguard itself and grow economically.


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Topics: Talent Acquisition, C-Suite

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