Shrinking workforce limiting UK economic growth, MPs warn

Shrinking workforce limiting UK economic growth, MPs warn

21 Apr    Finance News, News

The UK’s shrinking and ageing population is limiting economic growth, with “outdated and static” working practices, MPs have warned.

An “exodus” of over-50s from the labour market has worsened shortages, a cross-party House of Commons Business, Energy and Industrial Strategy (BEIS) committee report said.

Chairman Darren Jones said: “Our shrinking and ageing UK labour market, and the lack of political leadership on this issue, is holding back economic growth.”

Polling for the report, titled ‘Post-pandemic economic growth’, published today, found many in the workforce who had taken early retirement would return to work in flexible or part-time jobs.

Deltapoll sampled 1,031 45-60 year olds, between 6 and 12 March, and found just over half of early retirees regretted their decision to leave the workforce.

Barriers to workforce

But limited protections over non-full time work acted as a barrier to employment, MPs said.

It comes after Chancellor Jeremy Hunt’s budget focused on tackling barriers to work with a view to supercharging the UK’s economic growth prospects in the medium-term.

Ministers should consider either setting up a new Ministry for Labour; appointing a new cabinet office minister for labour; or convening a cabinet committee to coordinate policy.

Weak workers’ rights enforcement left them vulnerable to “unscrupulous” employers, and MPs urged the government to create a single watchdog to monitor the issue, the report said.

It follows high-profile hearings with British Gas, P&O Ferries and Amazon.

‘Outdated and static’

Evidence to the committee found the UK had less than half the number of labour inspectors to meet global standards, while firms are inspected by National Minimum Wage teams every 500 years.

Jones added: “What we have now is outdated and static while working practices move on.

“Weak or absent enforcement means workers can be exposed to exploitative practices without any consequence, rendering their rights worthless.

“We won’t be able to move the dial on economic growth in our country until we invest in, support and make the most of the potential of every worker across the UK.”

The Department for Business and International Trade (DBIT) has been contacted for comment.

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