The UK wants to crack down on foreign workers. Businesses worry Brits can't — or won't — fill the labor gap

CNBC

14-05-2025

British businesses are warning the U.K. government that plans to tighten immigration rules on foreign workers — and to instead train and recruit more British personnel — will lead to labor shortages in key sectors.
The British government on Monday announced plans to cut migration to the U.K., tightening the rules on who can come to work, study and live in the country.
The proposals raise English-language requirements for migrants, as well as the skills and level of education they need to obtain work visas. The government also said migrant workers would have to live in the U.K. for 10 years in the country before they could apply to stay indefinitely.
The government said its new proposals "back British workers over cheap overseas labour" and would link migration policy with skills to boost economic growth.
But businesses fear that Brits can't — or won't — fill the gap created by likely worker and skills shortages, particularly in sectors traditionally heavily-reliant on migrant staff, such as health and social care.
It was already a "struggle" to recruit British workers and was "very, very unusual" to attract home-grown workers into the social care sector, one care home manager in the South of England told CNBC.
"It's been years, a good couple of years that we haven't had any British applicants, English applicants," the care home manager, who could only speak anonymously because of the sensitivity of the matter, told CNBC on Tuesday.
"I hear lots of things like, you know, Morrison's [supermarket] pay more, McDonald's pay more. You hear all those comments out in the community. The pay isn't great for care, so it is a struggle," the source said.
"I would say probably 70% of our workforce on the care team are from India. Without those girls, our residents ... wouldn't have had anyone to look after them ...What do you put in place [to fill that workforce]? You can't make people work. You can't make people look after these residents."
The government has come under increasing pressure to tackle the thorny issue of immigration amid record migration figures. The strong performance of Nigel Farage's right wing, anti-immigration Reform UK party in opinion polls and in recent English local elections has increased the need for the government to act quickly, however.
Announcing the plans Monday, Britain's Prime Minister Keir Starmer said the strategy "will finally take back control of our borders and close the book on a squalid chapter for our politics, our economy, and our country."
He added that immigration reforms would end what the government described as the country's "failed experiment in open borders" that saw migration soar to almost one million a year, noting it would ensure that "people coming here earn the right to stay in the country."
The government said in its blueprint on immigration that steep increases in net migration in recent years had been caused by "a big increase in overseas recruitment including a shift towards lower-skilled migration, with a substantial increase in worker visas issued below degree level."
For example, it said it had seen a sharp increase in the number of people arriving via the health and social care visa route to work in below degree-level jobs, from 37,000 in 2022 to 108,000 in 2023.
Net migration hit a record high of 906,000 in the year to June 2023, but fell in subsequent twelve months to 728,000, according to the Office for National Statistics.
The government said Monday that it will now "end overseas recruitment for social care visas" although visa extensions would be permitted until 2028.
Care England, which represents independent social care providers, warn that the immigration plans could have "serious consequences for a sector already under immense pressure." It noted that the care industry currently has 131,000 vacancies.
"Let's be clear – this decision is not a solution," Care England's Chief Executive Martin Green said responding to the government's plans Monday.
"It is a political gesture that treats the symptoms but ignores the disease. Rather than investing in the sector and solving the recruitment crisis, the Government is closing the door on one of the only workforce pipelines still functioning. Social care is not low-skilled work. It is high-skill, low-pay work that deserves respect, proper recognition, and meaningful investment."
Green said, "While concerns around exploitation must be addressed, the proposed solution – ending overseas recruitment entirely – removes a vital workforce supply without establishing a viable domestic alternative."
Business industry leaders say the move to boosting training and skills among British workers is welcome, but warned that labor shortages were likely to become more acute.
"Employers are clear: boosting training in the U.K. is essential, but so is a controlled, affordable and responsive immigration system that keeps investment flowing to the U.K.," the U.K.'s Recruitment and Employment Confederation Chief Executive Nick Carberry commented Monday.
Businesses will now have to carefully consider the detail of proposals to limit visas for skilled jobs below degree level, the Confederation of British Industry said.
"Labour shortages can't be solved by training alone. With the U.K.'s workforce set to shrink in the future as our population ages, it's more important than ever that we support the business investment needed to underpin tech adoption and training," Rain Newton-Smith, the CBI's chief executive, noted.
Businesses are keen to unlock more "home-grown talent," said Jane Gratton, deputy director of policy at the British Chambers of Commerce.
"However, it's vital that the pace of change in the immigration system does not cut off access to global talent before the U.K.'s wider labour market problems are properly addressed," Gratton noted.
Firms need access to the right skills to grow the economy, she said, and for some businesses that will include bringing people from outside the U.K.
"This is usually as a last resort when they have tried all they can to recruit from the local labour market," Gratton said.