Labour’s immigration plan is an imaginative proposal

Importing skilled labour is a two-edged sword:  a source of both economic boost and serious threat for the UK in the modern world.

On the positive side it can fill skills shortages and it can build up capability much more quickly than the recruiting and training of local resources could possibly achieve.  Indeed, if we are to ‘re-balance’ our economy – as everyone now seems to be advocating – it is essential to utilise such skills both to re-build capability and to create new industries.  Without doing so, the timescale is just too long.

With the relative demise of two of our leading industries -pharmaceuticals moving to Asia and defence suffering from budget cuts throughout the Western world – there is actually a danger of us becoming more reliant on financial services.  We have allowed our other manufacturing sectors to run down over decades, the challenge is to re-build them quickly enough.

As one leading industrialist said to me recently:  ’I need to recruit 300 design engineers. At best, I can recruit 100 in the UK.  If I can’t import the skills, I have to export the jobs.’

Indeed, the ability to attract such international capability is a competitive advantage that is all too easily overlooked, particularly in areas like the creative industries. We should recognise and nurture our ability to accumulate such skills.  If you go to any of the centres of innovation around the world or the great research universities, you are immediately struck by the multiplicity of nationalities found in such locations.

But there is a downside.  Bringing in overseas workers inevitably provides a disincentive to develop skills, to train staff and to build up and retain experience.  It not only fails to give opportunity to young people to develop, it leaves the nation vulnerable to the availability of such skills on the international market and to the UK’s continuing ability to attract them.  The reliance on immigrant staff in a vital area like healthcare has to be a source of concern.  It is not that their skills are unwelcome or unappreciated.  It is the UK’s increasing dependence on them that is the issue, not to mention the morality of bringing in health workers from parts of the world where their services are needed badly at their original source.

Imported labour can become the quick fix, the easy solution. Used to supplant rather than supplement the use of locally developed talent, it leads to the situation we see in football, where the majority of players in the leading clubs are drawn from overseas and the national team languishes, suffering from lack of domestically developed talent.

The dilemma is how to make it easy for companies to bring in skills either to extend their capability or to respond quickly to opportunities, whilst not doing so at the expense of developing a much more highly skilled UK workforce: something on which the UK’s long-term economic health depends.

Against this background, today’s proposal by the Labour Party makes interesting reading.  It requires companies bringing in overseas skilled workers to balance the effects of this action by offering additional apprenticeships to staff already here or if unable to do so, to pay a levy to fund training elsewhere in the UK. It’s an imaginative idea, recognising that the UK’s long-term economic health is dependent on building up a much more highly skilled workforce and ensuring that more companies play their part in this task.

The challenge will be to ensure such a scheme is implemented without it becoming a further bureaucratic obstacle to businesses moving quickly to respond to demand and opportunities.  The politicians will need to work with business on the detail. But the principle has got to be right.

Sir George Cox is former Head of the Institute of Directors