Business leaders warn immigration reforms could undermine growth that does not require urgent training reforms
Leading conglomerates warn that the UK government’s ambitious immigration reforms have the potential to hurt economic growth and deepen the country’s skills crisis unless a basic overhaul of the domestic training system is underway.
After Prime Minister Sir Keir Starmer announced a “integrated plan” to reduce immigration, the Institute of Directors (IOD) said the proposals could have exacerbated the labor shortages across key sectors.
“These programs have the potential to undermine already vulnerable economic growth by further limiting employers' ability to fill emergency skills gaps. To make this strategy effective, the government must fulfill its commitment to more effectively link skills and immigration and inspire employers' training programs in training training programs to train the family's workforce.”
Under the new plan, immigrants entering all visa types in the UK will face stricter restrictions, with Starmer promising a total of less than 100% of the total. But business leaders say that without rapid reform of family labor training, these measures could leave employers without the skilled labor needed to compete and grow.
Stephen Phipson, CEO of Make UK, a manufacturer's organization, said many companies have turned to overseas recruitment only due to the long-term failure of the UK's domestic training pipeline.
“Currently structured apprentice taxation has been disastrous. Companies are unable to obtain the training they need, which makes it harder and easier,” Phipson said. He called on the government's upcoming industrial strategy, including a clear, urgent plan to build a UK technical skills base, warning that “the response must be significant, structural and rapid in the face of a crisis.”
The British Chamber of Commerce responded to these concerns. Deputy Director of Public Policy Jane Gratton supports the overall goal of reducing Britain's dependence on immigration, but warns against taking action too quickly.
“It is crucial that the pace of change in the immigration system will not cut opportunities with global talent until the broader labour market issues are correctly addressed,” she said. “Companies need to acquire the right skills – for some, this will include hiring internationally when local recruitment fails.”
The United Kingdom Industry Federation (CBI) has also raised red flags, especially in further restrictions on student visas, which could jeopardize the financial situation of universities and strengthen the destructive narrative surrounding the use of migrant workers.
“The reality of businesses is that filling vacancy with immigrants is more expensive and difficult to fill vacancy than local or trained workers,” said Rain Newton-Smith, CEO of CBI. “Labor shortages cannot be addressed simply by training. As the UK’s workforce will shrink with population age over the next few decades, it is more important than ever that we support the business investments needed based on technology adoption and training.”
Business and policy leaders are closely following government advice. Although ministers have made it clear that the need for migrants is needed to reduce the demand for immigration, the consensus among industry voices is that doing so without addressing structural flaws in skills policy can weaken rather than strengthening the UK’s long-term economic resilience.
