New government ‘must commit to flexible labour market’, say CBI
Business lobby group the Confederation of British Industry (CBI) today warned more than seven in ten businesses fear they won’t have access to skilled workers they need in the next year.
Britain’s plans for a new post-Brexit immigration system risk the flexibility of the UK’s labour market, which could cause a shortage of skilled workers, it said. Nine in ten firms say the UK’s flexible labour market is vital or important to competitiveness or job creation.
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CBI chief UK policy director, Matthew Fell said: “It’s clear what’s weighing heavy on businesses minds is uncertainty about the new immigration system.”
“After a generation-defining election, business and government must form a determined partnership and commit to working together to create a labour market that supports people and the economy,” he added.
Businesses expect these challenges to grow with over half of firms believing that the UK labour market will become less attractive in the next five years.
The employers group surveyed more than 300 businesses, with over half saying they would be hurt if immigration policy were not simplified.
A Home Office spokesman said: “As we end free movement, the new system will allow us to decide who comes to this country on the basis of the skills they have and the contribution they can make — not where they come from.”
The survey revealed that 43 per cent of firms expect to grow their workforce in the next year, similar to last year’s 45 per cent. Small and medium businesses are more confident about hiring than larger firms, it found.
Fell, said: “The UK’s labour market has remained remarkably resilient in the face of tougher economic conditions and uncertainty.
“But job growth is showing signs of tailing off and businesses are becoming more concerned about the competitiveness of the UK labour market.”
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Of growing concern is the minimum wage rate. The proportion of firms who say they can absorb the rising cost of wages has fallen year on year and sits at 39 per cent.
Over two thirds of firms said they would increase pay alongside or above inflation, but the national living wage is expected to rise significantly faster. It has grown 14 per cent since 2016, from £7.20 to £8.21 and will increase to 60 per cent of median earnings under the new government.