We wanted workers
Written by Maria Julia Pieraccioni, associate
Edited by Kevin Pringle, partner
30 September 2021
Good morning,
In his 2016 book entitled We Wanted Workers, George Borjas, Scrivner Professor of Economics and Social Policy at Harvard University, warns against the perilously oversimplified belief that a country’s immigrants are a “collection of labour inputs” and a cost to the social security net. The title of his book comes from a quotation that reads in its entirety, “we wanted workers, but got people instead”.
Staff shortages have been headline news recently—and for good reason. On Sunday, the UK government announced a scheme to issue 5,000 temporary visas for HGV drivers and poultry workers in order to quell recent delivery disruptions and limit these ahead of Christmas. A bandage, no doubt, to try to remedy the effects of the government’s halt in truck-driving licence testing during Covid-19 lockdowns. The shortage in lorry drivers became prominent news this week as it wreaked havoc in fuel supply chains, fuelling panic-buying and shortages. The government’s attempt to restore the situation, besides issuing temporary visas, has been to put a limited number of military tanker drivers on standby to deliver fuel if necessary.
However, the government has also quickly ruled out the possibility of introducing additional visa schemes for other sectors facing staff shortages. The BBC was told that the Home Office and Department for Business, Energy and Industrial Strategy were not discussing the possibility of visas in other sectors. The reality of the post-Brexit immigration system is rapidly rearing its head: a UK government official said that to move to a “high-wage, high-skilled economy, businesses should invest in their workforce and improve pay and conditions”. While that is true, to do so organically businesses would require the support of a healthy immigration system and a healthy economy. in fact, growth in wages and staff shortages may contribute to higher inflation, while these comments seem to disregard the fact that a sustainable economy must be comprised of both high-skilled and low-skilled jobs.
On Tuesday, the Financial Times published an open letter from representatives in the hospitality industry to reveal the extent of its staffing crisis. Stringent immigration policies have created shortages in critical jobs, as post-Covid consumer demand ramps up and the industry is faced with a shortage in trained staff. The Office for National Statistics’ latest report noted that from June to August 2021, job vacancies grew by 35.2% from last quarter. The largest increase in vacancies was in the accommodation and food services, which rose by 75.4%.
Both in the UK and elsewhere, staff shortages could become a bigger problem for post-Covid economic recovery. As the UK furlough scheme ends today, it is hard to tell if the return to the labour market of many people who have been furloughed will ease job vacancies. It is also hard to tell which industries will prove buoyant, and which will be left wanting workers.
Sir Keir Starmer’s speech to the Labour party conference set out his intention to never again go into election without a “serious plan for government”. The Labour leader’s speech set out new policies on mental health, education and housing, and markedly distanced Starmer’s leadership from his predecessor.
Murderer and former Metropolitan police officer Wayne Couzens’ horrific crimes against Sarah Everard were detailed at a hearing on Wednesday to decide whether prosecutors will be able to seek a life in jail sentence. The prosecution condemned Couzens’ abuse of power and position as a police officer, who used his police warrant card and handcuffs to lure Everard into his car.
The International Chamber of Shipping (ICS) and other industry groups have written an open letter to the heads of state attending the United Nations General Assembly warning of a “global transport system collapse”. Enduring quarantines, travel restrictions and mismatched Covid-19 vaccination and testing requirements have worsened supply chain logistics, with the ICS lobbying for governments to restore freedom of movement to transport workers globally.
Business and economy
Sterling has dropped to its lowest level this year after investors fear it may get caught in a high inflation, low growth trap. Investors are starting to fear that the pound’s disconnect to interest rates will make it highly unstable, one even dubbing its performance “emerging market”-like. (£)
Three energy firms, Igloo Energy, Symbio Energy and ENSTROGA, collapsed on Wednesday, joining several other energy companies that have been struggling with record high gas prices. Energy regulator Ofgem has reassured the 233,000 customers left stranded they will be redirected to another company.
The Takeover Panel announced on Wednesday that the outcome of the £10bn sale of UK supermarket chain Morrison’s will be decided in a one-day auction on 2 October. The regulator will run up to five rounds of bidding because neither the Fortress Investment consortium nor Clayton, Dubilier and Rice—the two largest contenders—have declared their offers final. (£)
Columns of note
Evergrande’s default on payments has revealed a large crack in the long-held belief that the Chinese housing market is “too important to fail”, argues this piece in The Economist. For several decades, Chinese economic growth has been linked with a boom in the housing and construction industries. However, the surplus in housing, coupled with unrepayable debts, have led to severe depreciation of the industry. China must decouple its economic growth from housing, by redirecting investment to mega cities, which tend to have “diverse sources of funding and competent administrators” as opposed to local land developments in formerly small towns. (£)
Off the heels of a year-long consultation to best tackle the laxity in data verification at Companies House, the Financial Times argues that time is running out for the government to act. Such existing and continued laxity in verifying corporations on Companies House has led to furlough fraud, which is estimated to have reached £3bn – but is expected to increase once the government’s coronavirus job retention scheme draws to an end this week. The National Crime Agency estimates that £100bn of laundered money washes through the UK each year, with the government favouring financial attractiveness to effective reforms. (£)
What happened yesterday?
London stocks finished trading in positive territory on Wednesday, underpinned by strong performances by market leaders of the FTSE 100 index, such as Next and AstraZeneca. The FTSE 100 ended the session up 1.14%, while the FTSE 250 inched 0.1% up. Meanwhile, sterling ended the day in negative territory, trading down 0.75% against the dollar at $1.34, and down 0.14% against the euro at €1.157. Sterling’s performance caused concerns among investors, Nomura investment bank even calling it “truly unpredictable”.
Meanwhile, on the European continent, gains in business and consumer optimism in the eurozone bolstered investor sentiment. The pan-European Stoxx 600 ended the day up 0.59%, with the German Dax and Spanish Ibex following suit, gaining 0.77% and 1.25% from the day prior respectively.
Across the Atlantic, stock markets on Wall Street bounced back from some of their losses on Wednesday due to investor concern of prolonged inflation and rising interest rates. The S&P 500 rose 0.6% by mid-afternoon, while the Nasdaq gained back 0.3% from the previous day’s 2.8% decline.
What’s happening today?
Finals
Avation
Lekoil
Interims
Andrew Sykes
ANGLE
Avacta
Bion
Ceres Power
Jade Road Inv
Lon.sec
Mycelx Di
OptiBiotix Health
Rockhopper
Synairgen
AGMs
Activeops
Altitude Group
Anglesey Mining
Argo Group
BMO Managed Portfolio Growth Trust
BMO Managed Portfolio Income Trust
Chill Brands
Dcd Media
Diageo
Insig Ai Plc
Kibo Energy
Merit Group
Nwf
Ormonde Mining
Pennpetro Engy
PHSC
Sosandar
Supreme Plc
Theworks.co.uk.
Trafalgar Prop
EGMs
Pjsc Tatneft
GMs
Augean
Bigblu Broadb.
Biopharma Cred.
Genedrive
San Leon
Final Ex-Dividend Payment Date
Barratt Developments
Chemring 7Prf
FRP Advisory
Hansard
Heavitree 11H
Kainos Group
Latham(j)8prf
Mattioli
Mid Wynd International Investment Trust
PHSC
Final Dividend Payment Date
Accrol Gp
Alpha Fin. Mkts
Gresham House Strategic
Interim Ex-Dividend Payment Date
Acorn Income
Avi Japan Oppo.
Braime Ord
Braime Holdings
Central Asia
Christie
Fevertree Drk
Fintel
Frenkel Topping
Games Workshop
Hays
Ingenta
Jpmorgan Multi.
Jpmorgan Rus
Jtc Plc
Kings Arms Yard
Lowland Inv.
Lxi Reit
Mortgage Ad
Oxf.tech 3 Vct
Personal Group
Rightmove
RIT Capital Partners
Smart Metering
Smith & Nephew
Strix Group
Stvg
TP ICAP
Travis Perkins
Wynnstay
Interim Dividend Payment Date
Acorn Income
Albion. Dev Vct
Alliance Trust
Atlantis Japan
Aviva 8 3/8 Pf
BMO Capital & Income Investment Trust
Bmo Real Est
Centamin PLC
Digital 9
Downing Renewa.
Ediston Prprty
Henderson Div
Boot(h) Prf
HSBC Holdings
Imperial Brands
Keystone 5Pf
Mondi
Nthn.elec.prf
Paypoint
Polymetal International
S & U 6Pf.
Sdcl Energy Ef.
Tate & L.6hpf
Temple Bar Investment Trust
TI Fluid Systems
Toc Property
Triple Pt. Engy
Triple Pnt Soc
Twentyfour Sel
Volta Fin
Volta Fin
Quarterly Ex-Dividend Payment Date
Aberdeen Di&g
Alpha Real
British American Tobacco
Nb Global
Scottish Inv
Vipera
Quarterly Payment Date
HICL Infrastructure
Honeycomb Inv.
NextEnergy Solar
Premier Miton
Raven Prop P
Renewables Infrastructure Group
Util
Special Ex-Dividend Payment Date
Hargreave
Hays
Kings Arms Yard
Travis Perkins
Special Dividend Payment Date
Icg-longbow
UK Economic Announcements
(07:00) Current Account
(07:00) Gross Domestic Product
(07:00) Nationwide House Price Index
International Economic Announcements
(08:55) Unemployment Rate (GER)
(10:00) Unemployment Rate (EU)
(13:30) Initial Jobless Claims (US)
(13:30) Personal Consumption Expenditures (US)
(13:30) Gross Domestic Product (US)
(13:30) Continuing Claims (US)
(14:45) Chicago PMI (US)
Last week, a Danish museum gave 534,000 kroner in cash to artist Jens Haaning, who was supposed to display it in two glass frames in another museum. The artist pocketed the cash, sent two empty frames to the museum, and changed the title of the artwork to ‘Take the Money and Run’.
(Source: @qikipedia)
Parliamentary highlights
House of Commons
The House of Commons is not sitting and will next sit on 18 October 2021.
House of Lords
The House of Lords is in recess and will next sit on 11 October 2021.
Scottish parliament
Parliamentary Bureau Motions
General Questions
First Minister’s Questions
Members’ Business
S6M-00875 Rhoda Grant: Community Wealth and the Emergence of “Green Lairds”
Parliamentary Bureau Motions
Portfolio Questions
Ministerial Statement
Autumn and Winter Vaccine Programme
Scottish Government Debate
Impact of Brexit on Scotland’s Supply Chain and Labour Market
Business Motions
Parliamentary Bureau Motions
Decision Time
Share this post