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By Scott Wright

THE UK Government must overcome its fear of talking about immigration and “come clean” over the reasons why the economy is facing an acute labour and skills shortage.

And governments on both sides of the Border should act with greater urgency and more closely with business to implement plans set out to drive growth, amid forecasts that the UK will be the worst performing of the Group of Seven leading industrialised nations this year.

Tony Danker, director general of the Confederation of British Industry, said labour and skills shortfalls are the most common concerns raised when he speaks to businesses in Scotland and England, alongside energy prices. But Mr Danker told The Herald that there is now “almost no economic migration” to the UK following Brexit.

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Labour shortages have also stemmed from people retiring early during the pandemic, health issues arising from Covid and the increasingly high cost of childcare, he said.

“The whole point about Brexit was to be able to control our borders, to be able to set out this great points-based system,” said Mr Danker, speaking shortly after appearing at the Our Scottish Future event in Glasgow. “What we actually have now is almost no economic migration [and] no policy changes at all despite the fact that we have these mass labour shortages.

“I think you should just come clean with the public [and] at say that ‘because of Covid people have retired from the workplace, because of Covid lots of people are dealing with health conditions, because of inflation lots of people are unable to afford childcare. Therefore, we are short of the skills we need in certain key areas. Therefore, we are going to have temporary visas in place to help with some of the shortfall we have while we solve some of the other problems and get the labour market stronger again.’

“I personally don’t think that is a hard sell. I would love to see political leaders make it.”

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Mr Danker said politicians in his experience have become “scared to talk to the public about immigration” and declared: “The problem is, once you take immigration off the table as a solution, you are trying to approach this problem with one hand tied behind your back.

“And we are not pushing for mass immigration. We are pushing for targeted worker visas to cover areas where it is clear we are not going to fill those shortages from within our borders.”

Mr Danker believes that the way the public responded to the contribution made by people originally from overseas to the NHS during the pandemic, and when the haulage industry was permitted to recruit from abroad amid the HGV driver shortage, showed they understand the need to be flexible.

“I think the public are responsive to this,” he said. “I think what they want is to be sure that we are countering illegal immigration, which is why I understand the Prime Minister is so focused on the small boats problem, because it does undermine public confidence in the immigration system.”

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He added that the solution lies with “bigger interventions” from policy makers in areas such as childcare and occupational health services to help people return to work.

“If we are not going to use immigration as our lever, then we need to have bigger, bolder more radical answers, including on skills,” he said. “The ability to upskill and reskill people to cover new kinds of jobs because of shortages, that is really important.”

Mr Danker was critical meanwhile of the Scottish and UK Governments for not showing greater urgency with their plans for economic growth.

He praised the content of the national strategy for economic transformation published early last year by the Scottish Government, which he said included several good ideas for promoting growth. But he said: “What we need is a little less conversation, a lot more action.”

Mr Danker said: “We need plans, milestones, deliverables. And the plans and deliverables need to be done jointly with firms. Because, if you want to build a more entrepreneurial economy, that is businesses that do that. If you want new market opportunities, that’s businesses that do that. If you want productivity… more skills… or to reduce inequality, you need to get into how firms can play a role in that. And when it comes to delivery, I just don’t think it is there.

“So, I really like the vision, but what I don’t see is the plan. I don’t see the milestones and the urgency, and I don’t see the joint working with business. I have a similar critique of the UK Government.”

Mr Danker said taking urgent action is vital because the CBI has a “genuine fear” investment will be directed by companies outside the UK, highlighting the decision this week by drugs giant AstraZeneca to build a new factory in the Republic of Ireland instead of here.

“We do have a world now where, certainly in the industries of the future which are predominantly global, flows of global capital will just go elsewhere,” he said. “I really urge the Scottish Government, as I have done [of] the Chancellor, to get much more purposeful about executing against a good strategy. But there needs to be more urgency and there needs to be more engagement with businesses to get it done.”