Starmer warns companies of an end to ‘low wages and cheap labour’

Starmer warns companies of an end to ‘low wages and cheap labour’

Labor leader Sir Keir Starmer will warn businesses on Tuesday that the era of ‘low paid and cheap labour’ from abroad must end as Britain’s two main parties reject calls from companies to more flexible immigration rules.

Starmer will promise that a Labor government would create a “new partnership” with business, but warn that he will not support unlimited immigration to tackle labor shortages.

In his strongest comments on immigration to date, Starmer would tell the CBI conference in Birmingham: “Let me tell you: the days when low pay and cheap labor were part of the Britain’s way of growth is over.”

Tony Danker, chief executive of the CBI, Britain’s biggest business lobby group, argued for a looser immigration regime on Monday, but the issue is seen by Starmer and Tory ministers as toxic, especially in the main marginal seats of the working class.

Immigration Minister Robert Jenrick said on Monday: “Our ambition is to reduce net migration. We believe this is what the British public wants – it was one of the drivers of votes to leave the European Union in 2016.”

Starmer will outline in his speech a migration plan under which “any movement on our points-based system — whether through the skilled occupation pathway or the labor shortage pathway — will come with new conditions for companies.

“We will expect you to come up with a clear plan for higher skills and more training, for better pay and conditions, for investment in new technology,” he will say.

Labor has been on a charm offensive on British business, seeking to capitalize on the concerns of many leaders about the political and business turmoil sparked by the Tory leadership race and Liz Truss’ ill-fated ‘mini’ budget.

While Chancellor Jeremy Hunt was criticized last week by business groups for failing to announce a strong policy to boost growth in the autumn statement, Starmer will say Labor would make it a priority.

“I’ll put it simply: Every company in this room has a growth strategy. A nation needs it too,” he said.

Prime Minister Rishi Sunak pledged in his speech to the conference on Monday to “ignite the innovation engine” of the UK, pledging to support innovative businesses and entrepreneurs.

Sunak said the UK would implement the “most attractive visa scheme in the world” for entrepreneurs and skilled tech workers.

As chancellor, Sunak has consulted on a plan to replace the “super deduction” tax relief that ends in April. But on Monday he declined to say whether he would consider a new scheme to incentivize investment in his place next year, instead pointing to existing ones such as the annual investment allowance.

Hunt pledged last week to maintain levels of government spending on R&D, but shocked the start-up community by cutting widely used tax breaks, which have helped spur innovation. Sunak did not address the decision, but pointed to improved R&D tax benefits for large corporations.

In separate remarks at the conference, David Bunch, Shell’s UK operations chairman, said the oil major would ‘assess’ its £25bn of investments in UK projects on a case-by-case basis after the government increased exceptional taxes on energy companies.

“When you tax more, you’ll have less disposable income in your pocket, less to invest,” Bunch said.

Sunak also pledged to put plans in place to help energy-intensive businesses deal with rising gas and electricity bills; government support is due to end in March next year. But he added that any help would go to businesses that need it most.

“We recognize a particular problem with a group of highly energy-dependent industries that we need to ensure we have a plan for and you can expect the Chancellor to address.”

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