The new post-Brexit economic model sparks debate in the UK

In the midst of a supply and labor crisis, the British Prime Minister, Boris Johnson, announced that in the post-Brexit era the United Kingdom it will no longer depend on immigration to rescue the market, in order to promote an economy of “high wages and qualifications”.

Economists and affected sectors are now weighing the consequences of the new model.

The question that circulates these days is whether it is possible to raise the salaries and the work profile of the British only by restricting immigration.

Alan Manning, Professor of Economics at the London School of Economics, stresses that “a broader economic strategy” is required, since, although the importation of workers affects the economy, “there are more significant factors”.

Without giving details about that overview, Johnson admitted that the transition to a labor market with fewer immigrants “will require a period of adjustment”, in which some sectors will adapt and others will perish or shrink.

At the forefront of the fight for survival are agriculture and livestock, which currently discard merchandise and sacrifice animals due to the lack of personnel caused by the Brexit and the pandemic.

Immigrants and standard of living

Faced with the nationalist narrative of the prime minister, the director of the Resolution Foundation study center, Torsten Bell, points out that not all immigrants are cheap labor, but especially those from Western Europe are usually well paid and therefore increase the average wage.

Studies also indicate that immigration had a “marginal” role in reducing income that was accused between the credit crisis of 2008 and the referendum on the British exit from the European Union (EU) in 2016, which was mainly due to “ to an increase in inflation and low productivity ”.

Bell also notes that immigration has declined “rapidly” since the plebiscite and COVID-19, when it is estimated that 1.3 million people may have left the country.

With a new migratory system by points in force that seeks to attract qualified foreigners, the impact of this exodus is especially noticeable in jobs with less status such as food processing; the hospitality industry; stock; administrative; carriers and delivery men.

The National Farmers Union (NFU) has applied for emergency visas to recruit butchers for slaughterhouses, the collapse of which has led to farmers having to slaughter their own pigs because they cannot keep them.

“Yesterday we killed 2,500 and in the next few days we will sacrifice 2,500 more. These are animals produced under contract to supply the retail trade, which must now be eliminated because they cannot enter the food chain ”, laments the president of the NFU, Minette Batters.

The same is true in horticulture, where fruit and flower growers throw away production by not being able to harvest it.

“We are at a crossroads. The government must decide whether it wants to keep these sectors or to dispense with them. This will mean having to import food, “says Batters, who believes that” an island with 70 million people should try to be self-sufficient. “

On the contrary, the Government has decided to grant 5,000 temporary visas to carriers, given the blockages in the supply chain that have caused shortages in some gas stations and supermarkets.

Temp in the spotlight

One way in which the Executive could meet the needs of specific sectors such as food is by “being more open” in granting visas for temporary workers, says Diego Sánchez-Ancochea, an economist from the University of Oxford.

“If they are not received, basically those sectors are being told that they are not of interest,” he points out.

Like Manning, Sánchez-Ancochea believes that the low wages especially in those less skilled jobs are not only due to immigration, but “to the low minimum wage and working conditions” in the United Kingdom.

“We know that the British labor market is very flexible, with perhaps not enough regulation,” he says.

The expert warns that a restructuring of the economy “is going to take time” and will require changes in the expectations of the population, since it can cause, for example, higher prices and less availability of certain products, especially if trade tensions persist with the EU.