Leading economist calls for ‘lenient’ migration rules

  • By Noor Nanji
  • Business Reporter, BBC News

It “absolutely makes sense” to be lenient on migration rules when companies face labor shortages, says a former chief economist at the Bank of England.

Andy Haldane told the BBC that the UK should be “liberal in our visa policy” to fill skills gaps and in turn help the economy grow.

It comes after the prime minister said legal migration was too high.

The Home Office said its system allowed people to acquire needed skills while encouraging investment in the country’s workforce.

Mr Haldane’s comments come ahead of new UK net migration figures due to be released this Thursday.

While the prime minister is under pressure to deliver on the Conservatives’ 2019 manifesto to lower net migration levels, some firms have warned that it will hurt their industries.

Sectors such as hospitality and retail are among those facing labor shortages.

Mr Haldane, who sits on the chancellor’s council of economic advisers, told BBC Radio 4’s Today program it was important to distinguish between “short-term and medium-term”.

He added: “Given the massive shortages in both staff and skills currently being felt by businesses across the UK – in every sector and in every region – it makes absolutely perfect sense in the short term for us to be lenient on our immigration rules, that we are liberal in our visa policy, in filling these skills gaps, to enable economic growth, to allow businesses to flourish.

Last week, Prime Minister Rishi Sunak told the BBC that legal migration to the UK was “too high”, but declined to give an exact number of people arriving in the UK.

He added that he was “considering a number of options” to limit legal migration.

And earlier this week, Home Secretary Suella Braverman called for less immigration and suggested more Britons should be trained to do jobs commonly done by foreign workers, such as driving a lorry and picking fruit.

A Home Office spokesman said: “The public rightly expects us to control immigration, which is why our points system provides benefits across the UK by prioritizing the skills and talent the UK needs while encouraging investment in the country’s workforce.”

Haldane also said the UK still lacked a fully developed industrial strategy.

“Right now we’re seeing a group of countries around the world engaging in very activist, big-budget acts of industrial policy,” he said.

“I think the UK still lacks such a well-formulated, big budget plan that would enable us to compete in a global arms race to bring business home.”

Haldane added that the UK strategy seems “fairly responsive at the moment”.

“Every week seems to bring another event, another looming loss in business,” he said.

It comes after one of the world’s biggest carmakers warned it could be forced to close UK factories if the government fails to renegotiate its Brexit deal.

It warned that it could face tariffs of 10% on exports to the EU due to parts origin regulations.

Haldane said: “Whether or not it was electric vehicles last week… it doesn’t seem like a strategy – and companies will tell you we’re still missing that plan ahead of events that trip us up.”

A spokesperson for the Department of Commerce said: “The government has laid out a clear strategy for UK manufacturing with a variety of programs that give sectors from automotive to aviation to low carbon technology access to the funds, talent and infrastructure they need.

“We are focused on providing a competitive business environment to drive growth, cutting red tape and investing millions in new government funding to help SMEs become more productive.”

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