Skills and Labour Shortages

Jim Shannon Excerpts

Thursday 12th January 2023 Westminster Hall

[Patricia Gibson]

I have absolutely no problem with freedom of movement—we have suffered enormously as a result of no longer having it—but I appreciate that the Government will not move in that direction, so I am asking them to allow our public and private sectors to recruit from Europe as and when they need to in order to fill their skills gaps and jobs gaps. That is very difficult. The skilled workers criteria are too narrow and do not fill the gaps, even for the sectors that they are intended to help. They are not enough and do not take into account the strains and shortages in areas of the economy that they are not directed at. I believe that the Minister and the Government understand all the difficulties that I and others have mentioned, but feel trapped by their rhetoric. I hope they will get over that and take a common-sense approach, for the sake of our economic prosperity.

The Government commissioned the Migration Advisory Committee to review the shortage occupation list, but I understand that the review has been paused pending clarification of the Government’s priorities surrounding the skilled workers route. When the Minister gets to his feet, perhaps he will give us more detail of how the review is going, when it will be unpaused, and when we might see some benefit from it.

In the absence of any attempt to address the very serious situation in the way that I and many people across this House would like, and that would have the necessary impact on the challenges, I urge the Minister at the very least to play his part in persuading his Government to allow a Scottish visa to be established, so that those who wish to live in Scotland and contribute to its workforce may do so. By way of precedent, similar successful schemes have been established in Canada, Australia, New Zealand and Switzerland on a regional basis. Scotland should not suffer from a one-size-fits-all UK approach; its demographic, geographical and labour needs are entirely different.

It makes sense to allow asylum seekers who come to the UK to enter our workforce. They are stuck in hotels or Home Office accommodation at huge cost to the taxpayer, but many of them have valuable skills that we need, and they are desperate to enter our workforce, while we suffer skills and labour shortages. That defies all common sense.

[Jim Shannon (Strangford) (DUP)]

I support the hon. Lady’s comments. In Northern Ireland, the Syrian scheme came in, and that was followed by the Afghan scheme. We still have people who came in through the Afghan scheme in the Marine Court hotel in North Down. I have made representations to the Minister and the Department. Local companies such as Willowbrook Foods and Mash Direct are willing to give those people jobs, and those people want to work, but we cannot get them into employment. They are still stuck in a hotel. Would anyone like to be stuck in a hotel for one and a half years?

[Patricia Gibson]

Absolutely. We often hear from those on the Government Benches about how expensive the system is. Well, there is a way out. There is a way to benefit our economy, the asylum seekers, our communities and our workforce. It is a no-brainer. The situation defies all common sense. Refugee Action has calculated that if asylum seekers were given permission to work, that could generate up to £330 million annually for the UK Treasury. I urge the Minister to do what he can to persuade his Government to support the private Member’s Bill brought forward by my hon. Friend the Member for Glasgow North West (Carol Monaghan), the Asylum Seekers (Permission to Work) Bill.

The Scottish Government are doing everything they can with their very limited powers to address skills and labour shortages across Scotland, and have developed a “working with business” action plan. They are identifying new and existing actions that they can take, alongside business and partners such as skills agencies, to mitigate the impact of skills and labour shortages, and to stimulate economic recovery through a range of employability, skills and sector-specific interventions. However, the Minister knows that the real levers of power that have to be used if we are to address the issue are with the UK Government. If he says that the UK Government are not willing to take the necessary steps right now to address the shortages that are damaging the economy in Scotland, as well as the rest of the UK, he should make the case to his Government for devolving the necessary powers to the Scottish Parliament, so it can tackle this problem in a more effective and logical way in the interim, before independence for Scotland. In that way, Scotland can in the meantime attract and retain those with the skills and attributes that we need in our workforce, so that our communities, our economy and our country can grow for the benefit of the people of Scotland.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on leading the debate and on setting the scene so well, as she always does. It is a pleasure to follow the hon. Member for Wirral West (Margaret Greenwood) and I thank her for her contribution. In her introduction, the hon. Member for North Ayrshire and Arran made a point that I referred to in my intervention, but I want to reiterate it and take it from two angles.

First, I will speak about the Afghan refugees who have been staying at the Marine Court Hotel in Bangor, in the neighbouring constituency to mine, since their arrival from Afghanistan. As I have made the responsible Ministers aware, two major food production employers in my constituency, Willowbrook Foods and Mash Direct, have jobs available right now. Those jobs were available months ago; indeed, they were available more than a year ago. I find it frustrating that we have people who want to be active and have skills, and that there are jobs available for them, so I support the point made by the hon. Member. I not sure whether that issue falls within the Minister’s remit, but if not, will he pass it on to the relevant Minister?

The situation is frustrating because there are vacancies in food production in my constituency that are difficult to fill. It is not as though employers have not tried to fill those vacancies; they have been energetic and have been into further education establishments and schools to talk to people at an early stage about that type of work. It is well-paid work, with excellent remuneration, but it is frustrating for them not to be able to recruit within their area.

In modern times, there often seem to be shortages in many things. For businesses, especially our small and medium-sized enterprises, shortages in skilled staff are rife. That has been brought to my attention by many business owners in Strangford. After a few horrific years, with the impacts of covid, a dire economy and the cost of living crisis, we have to improve the situation. There are things that we can do, as other hon. Members have said. Staff are the reason our businesses can function. Without a sustainable staffing base, businesses cannot work on a day-to-day basis.

I mentioned Willowbrook Foods and Mash Direct, and in both those cases, the companies were in a position to offer workers accommodation as well, which is a real plus. They are often looking for new staff to fill the most important roles in the business. They are casting their recruitment campaigns widely, across the whole Province. They bus people in from Newry and Mid Ulster, and people even come from the Republic of Ireland to work there.

The hospitality sector in my constituency is facing major staff shortages. We are fortunate to have a number of coffee shops and small cafés, and a coffee culture has been created in my major town of Newtownards. Examples of coffee shops in my constituency include Fika in Greyabbey, No8 Court Street in Newtownards and Sugarcane in Comber, but there is often high employee turnover and wages are, by their nature, low. Hospitality businesses have been reaching out to previous applicants to entice them back and to hire them to fill vacant positions, which shows the huge impact of labour shortages on the hospitality sector. There cannot be an MP in this House, including you, Sir Graham, who is not aware of the dire shortage of staff in the hospitality industry.

The shortage of skilled labour is now the second biggest threat to the motor repair industry, compared with being ranked the 10th biggest threat in 2020. The mechanical industry can combat the skilled labour shortage by incorporating apprenticeships to train and develop new talent. To my eyes, the major issue with skilled apprenticeships is the low rate of pay, which has to improve. The Minister has good ideas to take things forward, which I know come from his previous business, so I am keen to hear his feedback on how businesses can progress with apprenticeships.

There may have to be a wee bit of a difference, where some sort of apprenticeship bonus is paid to some of those companies. Most apprenticeships, by their nature, last three years. I can give the example of a constituent who started an apprenticeship for a well-known car company when he was 15. He was being paid £3.10 per hour for his work. Wow—not many people could get away with that, even with funding from their mum and dad. Government funding of apprenticeships allows for apprentices who want to continue their work with their company to be paid fully and fairly, causing less of a problem for staff and businesses.

The right hon. Member for Chipping Barnet (Theresa Villiers) rightly referred to apprenticeships and I endorse what she said; I feel that apprenticeships can be improved. Again, I look forward to hearing the Minister’s thoughts on that issue.

The Recruitment and Employment Confederation stated that the UK economy could lose up to £39 billion a year from 2024—a massive sum—if the Government do not resolve labour and skills shortages. In a way, we in Northern Ireland have been very lucky, because our population has risen from 1.75 million to just over 1.9 million. Most of those people coming in are from Europe or further afield, so I suspect that we in Northern Ireland do not feel the pain as much as people in other parts of the United Kingdom. When those people come over, many of them stay; when Brexit happened, they applied to stay, and I helped some of them get jobs. They have become a very integral part of our community. People from Poland, Latvia, Lithuania and Romania—lots of people have come in—have brought their culture and their work ethic into my Strangford constituency, and have done extremely well. I see a real bonus in retaining them.

To put this into perspective, that loss of £39 billion a year from 2024 is equivalent to losing almost the entire current defence budget. It is also equivalent to roughly two Elizabeth lines annually—by the way, that line is off today, for some reason. That shows the financial sums that can be lost if we do not get this right. If we take those figures at face value, we see how severe our labour shortages are. The public look to us in this House—to us as MPs, to our Minister and to the Department—to give them the support and the answers they need, so let us do that to support our local communities. I know the Minister well and I am very keen to get his thoughts on how we progress this issue. I do not say that just because he is a long-time friend; I believe that he has an understanding of the issue, and I look forward to what he has to say.