Sir Keir Starmer warns businesses ‘days of low pay and cheap labour must end’

The Labour leader presented a plan to train up people already here to solve the skills shortage, as Harry Horton reports

Sir Keir Starmer has warned business leaders that the days of “low pay and cheap labour” must end as he tells them to train up UK workers to wean Britain off its “immigration dependency”.

Addressing the Confederation of British Industry (CBI) conference on Tuesday, the Labour leader set out plans to invest more in training for workers already within the UK.

Sir Keir called for a plan to move the economy away from a "low-pay model" which he claims is stifling productivity and growth.

He has accepted the need for skilled foreign workers, promising a "pragmatic" approach to the shortage of workers in some sectors.

"Our common goal must be to help the British economy off its immigration dependency to start investing more in training workers who are already here," he told business leaders gathered in Birmingham. "Migration is part of our national story – always has been, always will be and the Labour Party will never diminish the contribution it makes to our economy, to public services, to your businesses and our communities. "But let me tell you - the days when low pay and cheap labour are part of the British way on growth must end. This isn’t about Brexit. "All around the world, business is waking up to the fact we live in a new era for labour. And while they’re adapting, our low-wage model is holding us back."

Sir Keir Starmer acknowledged that some cherished Labour policies would have to be shelved if he entered Downing Street in order to focus on dealing with the battered economy he would inherit.

He confirmed Labour would not take the UK back into the single market or customs union and that its "New Deal for Working People" would deliver higher pay and stronger rights.

Labour’s plans for reform include:

  • Ensuring all employers able to sponsor visas are meeting decent standards of pay and conditions

  • Speed up visa delays to avoid labour shortages damaging the economy

  • Introduce training and plans for improving pay and conditions for roles that require international recruitment

  • Reform the migration advisory committee that reports to the Government so it better projects future trends

The Labour leader also warned that businesses cannot be “more comfortable hiring people to work in low paid, insecure, sometimes exploitative contracts” rather than investing in new technology to boost productivity.

In a wide ranging speech, he said the Labour party is "different" to the one that he inherited as leader, saying the party is now "proud of being pro-business".

He stressed the way Labour had changed since he took over from Jeremy Corbyn in 2020, saying he had turned the party “inside out”. “This is a different Labour Party and there is no going back, we are ready for partnership.”

While acknowledging the Ukraine war has fuelled the economic downturn, he said that Conservative party policies have done "immense" economic damage to the UK.

Sir Keir said a 'vicious cycle of stagnation' has hindered growth in the economy

"When it comes to economic growth the verdict of the former chancellor is right: they have created a vicious cycle of stagnation," the Labour leader told the conference, saying it has been the worst decade for growth in two centuries. "And that is why every crisis hits Britain harder than competitors." Sir Keir went on to say there will be no more "trickle down experiments", as these have been "tested to destruction". This was an apparent reference to Kwasi Kwarteng's botched mini-budget in September which spooked markets with billions of pounds worth of unfunded tax cuts.

In reaction to the CBI speech, a Conservative Party spokesman said: “Keir Starmer talks tough on immigration, but all his ‘policy’ amounts to is giving big business all the cheap, low-skilled foreign labour it asks for. Labour wouldn’t lift a finger to support our domestic workforce to fill vacancies. “He is a dyed-in-the-wool open borders advocate who wants to give illegal migrants priority access to work permits and whose shadow home secretary won’t even say if she wants to see numbers fall.”

Sir Keir’s speech came as Rishi Sunak moved to deny plans ministers could look to realign Britain with EU laws. Some Conservative MPs have been angered by suggestions the government was weighing up a Swiss-style relationship with Brussels. But the PM told the CBI conference on Monday that the UK “will not pursue any relationship with Europe that relies on alignment with EU laws”.

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