Migration, work and health
Net UK international migration in the year ending June 2023 was 672 000. Net migration of EU nationals and British nationals was negative while there was positive net migration of non EU nationals, 33% of which are on work-related visas (around half of which were main applicants and the other half dependents).
Since June 2022, the total proportion of those arriving on those arriving on work-related visas has increased from 23% to 36%.
There could be a UK labourforce gap of over 2.5 million in the UK by 2030. This is because demand for labour has recovered faster than labour supply since the pandemic. There are around 9 million people in the UK that are economically inactive - meaning they are of working age but out of work and not looking to work. Reasons for this include being in full time education and having caring responsibilities.
Around 2.5 million people are economically inactive due to long term ill health and disability, and the rate of increase in this group has been faster than predicted, driving up the numbers that are economically inactive overall. Policy measures announced in the Autumn Statement 2023 aimed at reversing this trend are predicted to increase labour force participation by around 50 000 only. A labour force gap is significant in its impact on growth and government revenues, which has a bearing on funding public services.
One in four employers surveyed by the CIPD in winter 2022/2023 employed migrant workers, and 70% of those that do are reliant on migrant workers to some degree. The main reasons for this are employers finding it challenging to recruit UK-born workers to particular roles, or that UK- born workers are lacking in the necessary technical skills for these roles. Employers surveyed described migrant workers as useful hires because of a range of reasons, including language skills and technical ability, easier retention, flexibility and good work ethic.
Migration can help address the issue with labour supply that the UK is facing. But it will not address the demand on public services linked to high rates of economic inactivity in the UK population. People who are economically inactive due to ill health will draw down on welfare and health services, and this is compounded by missing out on the health benefits of work. Government revenues raised through taxation on migrant workers UK incomes may not adequately cover funds required to support increasing numbers of the UK population economically inactive due to ill health.
Increasing net migration for work may be essential to the survival of the UK economy but will only solve part of the problem and is unlikely to be an adequate or sustainable long term solution as the UK population ages and the disability-employment gap increases. The work and health issue will still be there and will likely escalate. Policy makers must not rely solely on migration but must pivot to addressing rising levels of economic inactivity due to ill health in the population as the only route to increasing labour supply while simultaneously reducing dependence on public services.