The whole of the moon

Think tank: Social Market Foundation

Author(s): Jonathan Thomas; Aveek Bhattacharya; Gideon Salutin

June 26, 2023

This report from UK think tank the Social Market Foundation looks at the challenges of labour shortages for UK immigration policy if aiming for a high-wage high-skill economy.

With labour immigration to the UK scrambled by Brexit, the pandemic, and broader developments in the practical economy, this report focuses on the challenges of labour shortages for UK immigration policy in the context of the avowed political aim – of both the UK’s major parties – of a high-wage, high-skill economy.

Focusing initially on the structure, operation and outcomes thus far of the post-Brexit employer sponsorship system for bringing in overseas workers to the UK, it includes interview and survey data from a range of sectors and employers utilising this system. The report then goes on to assess what has caused recent labour shortages in the UK, and the extent to which immigration policy has been both the cause of but also the solution to those shortages.

The tensions and limitations of short-term shortage-based reactive labour immigration policy are clear. In considering labour shortages as likely a longer-term feature of the UK economy, not a temporary blip, the report makes a strong case for the UK economy, in order to meet its: – shorter-term needs: recognising the many different categories, and large number, of migrants already in the UK through routes outside the employer sponsorship system who are available to work. – longer-term needs: recognising the need to cooperatively lock in longer term labour for the benefit of the UK, identifying future skill needs, and through global skills partnerships investing in training for overseas workers before they arrive in the UK.

Government and business must work together to build public confidence in a balanced approach to utilising immigrant workers as part of a better trained and better protected workforce overall, which must also benefit domestic workers. Doing this could also unlock opportunities to both simplify the rules, streamline the processes, and reduce the costs of the UK’s labour immigration system.