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A lack of workers has contributed to an “anti-growth situation” in the UK economy, warned the head of one of Britain’s business lobbying organisations.
Shevaun Haviland, director-general of the British Chambers of Commerce, said in an interview with the Financial Times that immigration reforms announced by the government last week — which included raising the salary threshold for skilled worker visas — would exacerbate labour shortages.
Speaking ahead of the second meeting of the BCC’s business council, Haviland said the package “will make the job market tighter in theory and will reduce the number of people coming”.
Business groups from sectors such as manufacturing and hospitality expressed alarm last week after home secretary James Cleverly announced reforms making it harder for employers to hire overseas staff and banning care workers from bringing their families to the UK.
Haviland said executives on the BCC’s business council would “no doubt” discuss immigration at the meeting, which will be attended by work and pensions secretary Mel Stride and Labour’s shadow pension secretary, Liz Kendall.
The council is an addition to the BCC’s traditional structure in which 53 local chambers, each with their own member companies, feed into local and national policymaking.
The creation of a special counsel for a group of large companies was widely interpreted as an attempt to take advantage of turmoil over allegations of sexual harassment and other misconduct at the rival CBI business lobby.
Haviland said the BCC had been considering launching a new national scheme before the CBI’s crisis.
“Then the thing happened to the CBI and a number of businesses came to us and said ‘can you help businesses needing representation’ and we weren’t going to turn them away,” she said. “That’s the market.”
While many companies have not returned to the CBI, the group has resumed activities, including meetings with ministers, and has claimed its finances are “stable” after heavy cost-cutting.
The BCC has yet to reach its target of recruiting 25 members to its business council but has already begun holding meetings for those that have joined, including Aviva, BP, Heathrow, Lloyds Banking Group and NatWest.
Meanwhile, three-quarters of the BCC’s wider membership said they are struggling to recruit staff and that this was holding back their business.
Haviland said that the two main drivers behind Britain’s sluggish economic growth were a “lack of people” and a “lack of investment”.
“Those two things of course go hand in glove because if you are thinking about investing in an expansion or new kit but you can’t find the people to make that happen then you’re not going to do it.
“The lack of a workforce that’s helping our businesses grow is the number one thing that they talk about. It is literally an anti-growth situation.”
In May Haviland called on the government to widen the “shortage occupation list”, which enables a 20 per cent reduction in the minimum salary threshold for visas in sectors with staff shortages.
“What businesses want is . . . a plan for the UK workforce,” said Haviland.
“That will be a combination of ensuring that everybody in the UK who wants to work can work . . . and if there are still gaps [having] an immigration system that is fit for purpose for our economy.”
The government recently unveiled measures to get economically inactive people back into work, aiming to plug about 1mn vacancies. But spending watchdog the Office for Budget Responsibility has estimated that this would only encourage 200,000 back into the workforce by 2028.
“The current system clearly isn’t working. These changes aren’t going to get another million people back to work,” said Haviland.
She welcomed the business tax breaks announced by chancellor Jeremy Hunt in the Autumn Statement last month but cautioned: “It is still going to be a tough few years.”
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