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The UK labour market in a post-Brexit world

This briefing note considers a number of ways in which the labour market could be affected as the UK moves to a tighter, post-Brexit immigration regime in January 2021. Under the new rules, legal avenues for low-skilled migrant workers to enter the UK will be more restrictively drawn, with implications for firms, resident foreign-born workers and prospective migrant workers alike.

We examine which industries have depended on a steady stream of foreign-born workers in recent years; identify those that are most likely to experience pinch-points in their labour supply as the immigration rules shift; and consider how firms in shortage sectors could be expected to respond. Although theory suggests firms should improve pay and conditions to attract and retain staff, there is a risk instead that they employ migrant workers outside of the law. This poses a challenge for the Government’s labour market enforcement strategy, as abuse is more likely to go unreported and hence undetected in such conditions.