CBI Director General Tony Danker: “Labor shortages everywhere” and EU exports at risk


Company editor

The Managing Director of the Confederation of British Industry has signaled signs of ‘labor shortages everywhere’, stressing that this is a potential obstacle to the UK’s long-term competitiveness.

Tony Danker, in an interview with The Herald, also warned of the risk that small and medium-sized enterprises would simply “move away” from exporting to countries in the European Union because of difficulties in the after Brexit.

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Asked about the renewed focus on the issue of independence north of the border, he said most Scottish companies he spoke to were “not convinced that it is the right time to have this debate “.

Mr Danker added: “I think that would be a diplomatic way to put it.”

He revealed that labor shortages had been one of the talking points when he spoke with Scottish business leaders on Tuesday.

Asked where these shortages were seen, Mr Danker replied, “You see them in obvious places like hotels and construction.

“You see them also in professional services, technology and engineering. There seem to be labor shortages everywhere.”

He added: “The question is what is cyclical and what is structural.”

On the question of potential drivers of skills shortages, Mr Danker cited the impact of the UK’s leave assistance program on the labor market and asked: ‘Don’t we really know what is going on in the market? from work until the holidays disappear? ”

He also noted the effect of people leaving work in sectors hardest hit by the pandemic.

Mr Danker highlighted the impact of people who have returned home, especially in EU countries, signaling a general belief that this was mainly the result of the coronavirus pandemic, but adding that the lack of return of these workers could be linked to Brexit.

He said: “It’s very difficult right now to unbox the people who are going home because of Brexit, the people who are going home because of the pandemic.”

Mr Danker warned that labor shortages could contribute to wage inflation and, in turn, put upward pressure on consumer price inflation.

He declined to give his opinion when asked for suggestions on what might be needed in terms of immigration policy to deal with labor shortages.

Mr Danker said: “All we know is that we have a new immigration system that wants to be much more forensic in the face of the real skills shortages in the economy.”

He cited the need to examine in the coming months which sectors were most affected by labor shortages, and what was structural and what was cyclical.

Mr Danker added: “The problem of the labor shortage is real. In the long run, this is a barrier to competitiveness, so we’ll look at it. ”

Asked about the problems faced by exporters following the UK’s departure from the European single market at the end of last year, Mr Danker spoke of the particular difficulties for small and medium-sized businesses.

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He said: “It is fair to say that the rules of origin and the cost of compliance make this very difficult, especially for SMEs. Most SME exports go to the EU. SMEs will get by. They’re just going to give up exporting because it’s too complicated. I think this is the biggest risk.

Mr Danker hammered home his conviction that politicians on both sides must lead to the “normalization” of relations between the UK and the EU.

He, meanwhile, welcomed Prime Minister Nicola Sturgeon’s emphasis on Tuesday on the focus on vaccination rates and hospitalization and death statistics in shaping coronavirus policy.

Mr Danker, saying he hoped Westminster would follow up with ‘that kind of advice’, added: ‘We cannot step into a world where we just follow the growth of infections and see this as a legitimate reason to shut down ‘economy.”

Asked about international travel, he said: “I think companies are quite confused right now about the Westminster government’s approach.”

He pointed to the confusion over the category of “orange” destinations and the previous belief of some people that they could travel freely to these places if they quarantined themselves upon their return.

Mr Danker said: “Then it looked like the amber was red with a different name.”

Prime Minister Boris Johnson said last month: “I think it’s very important that people understand what an Orange List country is. This is not a place you should go on vacation – let me be very clear about this.

“And if people are going to an Amber List country, they absolutely have to do it for some urgent family or business reason, so keep in mind that you will have to self-isolate, you will have to take tests and complete your form. locating passengers and everything in between.

Mr Danker said: “Early next week, we hope the government will release the framework it uses for international travel decisions as companies are currently confused.

“I think we now need real transparency on the frame.”

He stressed the importance of international business travel as well as leisure travel, noting that some felt it was “men in suits flying to New York at night,” but emphasizing that they were employees like engineering companies insuring contracts all over the world.

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Asked about constitutional uncertainty, in the context of the Scottish independence debate, Mr Danker replied: ‘The Scottish companies I have spoken to don’t really think about it or don’t want to think about it because they are so focused on the economy moving again.

“I think most Scottish companies I talk to aren’t convinced that this is the right time to have this debate… They don’t want to have the conversation. I don’t think that’s the policy per se.

He added: “To be distracted by the question of independence, I think, would be a completely missed opportunity for Scotland… This is the time when we should be talking about recovery. It is also the moment, like it or not… that we invest for the next decade.

“It is not in anyone’s best interests to hinder this potential momentum.”

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