Solve worker shortages with immigration – CBI bosson November 21, 2022 at 4:12 am

The UK should use immigration to solve worker shortages and boost economic growth, the boss of the UK’s biggest business group will say on Monday.

Tony Danker will call on politicians to be “practical” about immigration at the CBI’s conference in Birmingham.

Mr Danker will also say the UK should enable “economic migration” in areas where skilled workers cannot be found.

His speech comes as many firms struggle to recruit staff, with job vacancies near record levels.

But recent officials figures show the UK’s unemployment rate has edged up, and the Bank of England has forecast it will nearly double by 2025 as the country goes through a tough recession.

The Office for National Statistics (ONS) has also said UK business investment has dropped in recent months and remains below pre-pandemic levels.

Mr Danker will urge leaders to “be honest with people” over the country’s “vast” labour shortages, adding “we don’t have the people we need nor do we have the productivity”.

“First, we have lost hundreds of thousands of people to economic inactivity post Covid,” he will say. “And anyone who thinks they’ll all be back any day now – with the NHS under the pressure it is – is kidding themselves.

“Secondly, we don’t have enough Brits to go round for the vacancies that exist, and there’s a skills mismatch in any case. And third, believing automation can step in to do the job in most cases is unrealistic.”

Mr Danker will argue the country should have “economic migration in areas where we aren’t going to get the people and skills at home any time soon”.

“In return, let’s make those visas fixed term,” he will say.

Mr Danker is expected to praise some of the government’s Autumn Statement, which saw Chancellor Jeremy Hunt set out £55bn of spending cuts and tax rises in a bid to curb rising prices while also protecting public services.

But the CBI director-general will warn that the UK must go further in order to solve years of stagnating growth.

On Friday, the chancellor said immigration would be important for the UK economy in the years ahead, but the government still wanted to bring numbers down.

He said he wanted to improve skills “at home” to lower dependence on foreign workers.

The CBI, which represents 190,000 UK businesses, is expecting to see senior politicians attend its annual conference, starting on Monday.

The UK’s economy is performing worse than other major nations and is smaller than it was before the Covid pandemic.

The government has said the UK is already in recession, which is defined as when an economy shrinks for two three-month periods in a row. It’s a sign an economy is performing badly, with companies often making less money and unemployment rising.

The causes of the recession are in part global factors, with energy and food prices soaring this year due to the war in Ukraine and Covid.

But the UK also faces significant labour supply challenges due to it being more difficult for small businesses to trade with Europe or recruit workers due to Brexit, which ended freedom of movement for EU citizens coming to the UK and vice versa.

According to figures from the ONS, net migration to the UK was estimated to be about 239,000 in the year ending June 2021, a slight fall from the previous year’s figure of 260,000. The figure was driven by immigration from non-EU countries.

Last month, a survey by the CBI said almost three-quarters of UK companies had suffered from labour shortages in the past year and nearly half surveyed wanted the government to grant temporary visas for roles that were in “obvious shortage”.

The boss of retailer Next has urged the government to let more foreign workers into the UK to ease labour shortages.

Lord Wolfson, who was a prominent advocate of Brexit, said the UK’s current immigration policy was crippling economic growth.

The government has introduced a skilled worker visa scheme for some occupations facing shortages. It also has a seasonal workers scheme to cover jobs such as fruit pickers, and a health and care visa for medical staff.

Mr Danker will say people might be “arguing against immigration but it’s the only thing that’s increased the potential growth of our economy since March”.

“Growth is a precondition to a stable society. Without growth the NHS gets worse not better. People’s lives get worse not better. And we lack the resources we need to transform ourselves to a zero-carbon world,” he will say.

“Yet Britain’s had 15 years of low growth and flatlining productivity. We can’t afford a repeat.”

Mr Danker will also urge trading regulations to be reformed, saying: “I know that some Conservative politicians today feel that this issue is the fault of Europe. But the biggest regulatory barriers facing businesses today are based on British laws, created by a British Parliament, and administered by British regulators.”

Mr Danker told the BBC on Sunday that the chancellor’s Autumn Statement offered no plan to revive economic growth, and that Mr Hunt had instead prioritised stability.

Speaking on Sunday with Laura Kuenssberg, Mr Danker said Mr Hunt’s statement had been “all about fighting inflation and getting the government budget in some decent shape and that does need to be done”.

“There was really nothing there that tells us the economy is going to avoid another decade of low productivity and low growth,” he added.