CBI urges Jeremy Hunt to ease immigration rules to ease UK staff shortages

Britain’s leading business lobby group has urged Jeremy Hunt to use this week’s autumn statement to shake up immigration rules to support businesses struggling with chronic staff shortages and a looming recession.

The head of the Confederation of British Industry (CBI) said on Thursday urgent action was required from the Chancellor to support the economy, including ‘tough policy choices’ to allow more foreign workers into Britain as employers grapple with a desperate shortage of staff.

While Hunt is expected to offer light porridge to businesses and individuals in a fall statement focused on balancing the books through tax hikes and spending cuts, the CBI said ‘free’ options to sustain economic growth needed to be taken or that businesses would “go into hibernation” this winter.

After the financial storm caused by Kwasi Kwarteng’s disastrous mini-budget, Tony Danker, the CBI’s chief executive, said its members had agreed on “tough tax choices” on spending and taxes. However, CBI members feared the government was unwilling to take on Tory backbenchers on issues such as immigration and planning reform, which divide the Tory party but could back the government. economy.

“With fiscal and monetary policy tightening, we need a lot more growth-friendly policies for our economy, if we are to avoid a decade without growth,” Danker said. The Chancellor promised to present a plan for growth on Thursday, but said it needed to “address the real obstacles we are facing at the moment”.

Ahead of what is expected to be an austerity budget, the lobby group that speaks on behalf of 190,000 businesses nationwide, said the failure to tackle labor shortages and encourage Business investment would be very detrimental to the economy in the short and long term.

“Failing to match spending and tax measures with measures to address labor shortages and productivity is likely to be detrimental in the short and long term,” Danker said. “A desperate lack of workers inflates wages and prevents business growth.”

“Our planning rules allow local authorities to obstruct the big projects that we need. Our regulatory regime is not doing enough to encourage investment and innovation. Changing that is far more important than partisan efforts to simply repeal EU laws that will make no positive difference for most businesses.

Last week, Simon Wolfson, chief executive of clothing and homewares retailer Next, urged the government to make it easier for foreign workers to enter the UK, saying it was ‘not Brexit I wanted “.

The Tory peer and Brexit supporter said the government was preventing essential workers from entering the UK, even though businesses were in desperate need of labour.

Business leaders warn that sectors such as hospitality, construction and manufacturing are suffering the worst staff shortages. The CBI said the government’s shortage occupations list, which offers easier work visas for foreign workers in specific jobs, could be expanded. Student and graduate visa routes could also be added, as well as visas linked to specific economic projects.

It comes amid signs of plummeting business confidence after the turmoil sparked by the Truss mini-budget. According to a survey of 1,400 UK companies by Accenture and S&P Global, board confidence fell to its lowest level in at least 13 years in October.

Industry leaders have warned that crippling energy costs are a growing concern ahead of a ‘cliff edge’ in favor next spring, when the government’s energy bill relief program is due to end on March, 31st.

The British Chambers of Commerce (BCC) have said half of small businesses will struggle to pay their bills when support ends, while calling on the government to announce new measures to help businesses with rising costs.

Shevaun Haviland, the chief executive of the BCC, described it as a worrying figure, but said it was “even more concerning” that 4% said they would not be able to pay at all without the subsidy.

With more than 5.5 million small and medium-sized enterprises (SMEs) across the UK, if this were replicated nationally, more than 220,000 SMEs would be at risk, she said. “There is a precipice looming, and companies will find it difficult to see beyond it.”

The CBI said on Thursday that a fall statement did not provide enough incentive for companies to invest in capital projects and that new innovations could risk “another decade” of sluggish economic performance, making a new one more likely. series of spending cuts and tax hikes.

Official figures last week showed Britain’s economy took its first steps towards a potentially long recession in the three months to September, as inflation was at its highest level since 1982.

In the uproar that followed the mini-budget, Liz Truss backtracked on her plan to reverse a corporate tax hike next spring. The expected rise of 19% to 25% will now continue from April. However, the CBI said the damage to sentiment caused by the brief ‘Trussonomics’ experiment meant many global companies were opting out of investing in the UK next year, while warning Hunt needed to change his mind. .

“Many companies are preparing their 2023 budgets right now,” Danker said. “They see the growth ahead and want to invest, but fear that all the signals from policy makers are warning them against it.”

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