UK labour immigration policy: a perspective from the Social Market Foundation

The Social Market Foundation’s (SMF) has published a report on the current state of labour immigration policy in the United Kingdom.

The report assesses the UK's labour immigration policy in light of labour shortages following Brexit and the COVID-19 pandemic. It details the challenges and opportunities associated with shaping immigration policy and outlines the steps the Government and businesses should jointly take to address short and long-term labour needs. The report also emphasises the need to “build public confidence in a balanced approach to utilising immigrant workers…., which must also benefit domestic workers.”The report makes a number of recommendations to achieve these objectives:

Recommendations

1) Joined-up labour force utilisation

The report recommends making the most of the workers who are already in the United Kingdom.

This is a logical step which should help tackle the misperception that migrant labour is a first resort, offing a cheaper substitute for domestic resources. The following steps are proposed by the SMF:

1. Invest in training, upskilling and reskilling of the existing workforce.
2. Address underutilisation of resources and skills for example by addressing intrinsic and extrinsic barrier.
3. Reduce unemployment, including under-represented groups in the local workforce, e.g. ex-offenders.
4. Increase the number of economically active individuals within the current population.
5. Extend working life.

It is anticipated that these steps would decrease labour shortages in both low and high skilled professions across the UK.

2) Joined-up labour force planning

The report goes on to suggest the government should implement a more structured approach to workforce planning, including skills and employment support.

This Migration Advisory Committee (MAC) previously raised this point in 2022, stating “It is disappointing that there is a lack of joined-up thinking across Government, in cooperation with the private sector, on how to proactively manage and address shortages in the labour market. There is no coherent, overarching strategy for skills and employment … to facilitate a robust skills infrastructure, enable employers to improve pay and conditions and automate where appropriate, and encourage inactive workers into employment.”

This is no easy solution. It requires stakeholders to evaluate a number of uncertain factors such as the impact of innovation, the drive for automation and fluctuating recruitment needs. Proactive engagement from all sides will be required if the government is to develop workable longer-term, strategic solutions suitable for all.

3) Joined-up labour force protection

The third suggestion addresses exploitation risk and encourages a more robust system to prevent the abuse of migrant workers. Stronger minimum wage enforcement is encouraged amidst stricter, better resourced, and more unified labour market regulation and inspection.

This approach complements the Government’s recent commitment to increase immigration enforcement action against non-compliant businesses. It is hoped that these strategies will discourage unscrupulous employers from exploiting vulnerable workers and according to the report, improve public acceptance that labour immigration is adequately regulated.4) Presenting the joined-up benefits of labour immigrationThe SMF states businesses could also do more to build support for labour immigration by helping to highlight the contributions that immigrants bring to the resident UK population as not just workers, but also consumers, employers and taxpayers.

This approach presents a more holistic view of immigration and may help to reframe the way that some, including policy makers, think about migrant workers.

Summary

The SMF report offers valuable insights into the current state of labour immigration in the UK and presents balanced recommendations for policy reforms to increase domestic labour force participation and reduce perceived over-reliance on overseas workers.

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If you would like to discuss any of the issues raised in this immigration article further or would like to discuss how your business may benefit from international recruitment, please contact Emma Brooksbank and Megan Moorhouse.