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Monday, Oct 25, 2021

Pro-Brexit Next CEO says the government is getting it wrong on immigration

Pro-Brexit Next CEO says the government is getting it wrong on immigration

As the country lurches into a second week of petrol shortages, there is a risk that the debate about immigration slips back to referendum battle-lines, with politicians becoming increasingly irrational, entrenched and divided.

That would be a mistake. There is a workable solution to managing the UK’s need for overseas skills; but it requires us to avoid the descent into the bitterness that seems to accompany any debate involving Brexit.

Let’s start by recognising that the only thing Brexit decided was that the UK must determine its own immigration policy. The vote did not decide what that system should be; nor did it determine that only those on one side of the Brexit debate should have a say going forward.

I suspect there is more consensus than the headlines admit. Many Brexiteers, myself included, have vocally advocated for liberal immigration. While those who want strong controls on immigration do not want a shortage of goods, a lack of carers or rampant price inflation. In principle, most agree that we want neither open floodgates nor raised drawbridge.

To move forward, Whitehall must be under no illusion: labour shortages are a real problem. The dearth of HGV drivers is just a very visible example of a chronic problem affecting thousands of restaurants, care homes, small businesses, hospitals, fruit farms, warehouses and more, along with all manner of seasonal work. Of course businesses can, and should, try to recruit workers here in the UK — believe me businesses everywhere are trying. But if the problem is that employees are simply not available in sufficient numbers, then cash alone cannot conjure up more people. Seasonal work can be a particular problem in this respect, especially in areas of high employment, where many local people already have permanent or higher skilled jobs. In these circumstances raising nominal wages can only result in a Seventies-style inflationary spiral.

My worry is that our political leaders will get so caught up in the heat of the argument that they will miss the solution. Post-Brexit Britain can have the best of all worlds. We can have an immigration system that accurately gauges the number of workers, with the right skills, in the places they are most needed and ensures that overseas workers do not displace or undermine UK workers. We can enjoy the prosperity that overseas skills can deliver to our economy and avoid the risk of it undercutting UK wages.

The answer is to create a demand-led system, that allows the needs of our economy to pull in the talent we really need. For example, why not allow businesses to sponsor as many work visas as they need, with two vital caveats: firstly all overseas workers must receive the same pay as their UK colleagues and secondly, businesses must pay a percentage (say seven per cent) of overseas workers’ wages to the Government as a visa tax.

This market-led skills system overcomes two inherent problems in our current arrangements. Firstly it takes the job of deciding which skills are needed away from a small number of overworked Whitehall officials. It is easy to criticise those who have offered visas to dancers and artists (really) while believing HGV drivers are surplus to requirements. But it is important to recognise that these beleaguered civil servants have an impossible task. Deciding exactly which skills the country needs is beyond the abilities of any one group, it must draw on the collective intelligence of hundreds of thousands of UK businesses.

But such a system does more than just get the right skills. By charging a small but meaningful premium for employing overseas workers, it controls numbers and removes the worry of depressing UK wages. Clearly businesses will avoid paying an unnecessary premium for overseas work if they can find the right people here in the UK, so the main legitimate objection to market led approach to immigration falls away.

Of course, the system suggested above is only an example, but I think it points to an answer that might be acceptable to all. And if we can find a good answer to this question, we will do far more than solve a skills crisis. We will lay the foundations for a prosperous and open society. A society that can control its borders, grow its economy and give the same opportunities to future generations of immigrants that it gave to so many families in the past (including mine).

Lord Wolfson is chief executive of Next

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