Labour Shortages Highlight Necessity Of Immigration Policy Reforms In The UK

Businesses across the UK are urging policymakers to rethink immigration policies amidst growing labour shortages and economic uncertainty. Rain Newton-Smith, the head of the Confederation of British Industry (CBI), has emphasised the significance of economic migration for job creation, investment, and economic growth. Her concerns arise as the government prepares to unveil its immigration white paper, which aims to address record levels of net migration and workforce challenges.

Newton-Smith stated that economic migration should not be conflated with issues regarding border security or illegal immigration. She argued that hiring foreign workers is often more costly and complex than recruiting domestically, but remains crucial to tackling critical skill gaps. Sectors like healthcare, education, and technology are already feeling the weight of constrained workforce availability.

UK employers, including leading institutions such as Tesco, AstraZeneca, and Centrica, face numerous hurdles, with nearly nine million economically inactive individuals contributing to the strain on domestic recruitment. Reports suggest that the forthcoming white paper may impose stricter requirements on employers, potentially preventing them from hiring foreign workers unless they prioritise domestic training and recruitment development.

Newton-Smith criticised the government’s overarching reliance on net migration targets, calling them an “incredibly blunt tool” ill-suited to addressing nuanced workforce needs. Instead, she advocated for more flexible strategies, allowing targeted visas to fill specific labour shortages, particularly in high-demand fields such as science, engineering, and education. Measures to attract international students and highly skilled workers were highlighted among the CBI’s recommendations.

The academic sector similarly faces challenges, with almost half of England’s higher education providers predicting deficits by 2024-25 due to reduced international student enrolment. Past policy changes, such as cuts to student visas, have alarmed UK universities, threatening their financial stability and their ability to compete globally for talent.

As businesses await clarity on upcoming immigration reforms, employers have called for a renewed emphasis on upskilling domestic talent through initiatives like modernised apprenticeship schemes. Newton-Smith underlined the urgency of bridging skills gaps while maintaining pathways for economic migration to ensure the UK workforce remains competitive in a rapidly evolving global economy.