Starmer warns businesses of end to ‘low pay and cheap labour’

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Labour leader Sir Keir Starmer will on Tuesday warn businesses that the days of “low pay and cheap labour” from overseas must end, as both main UK parties reject calls by companies for looser immigration rules.

Starmer will promise that a Labour government would create a “new partnership” with business but will warn that it would not support unrestricted immigration to combat labour shortages.

In his strongest comments on immigration to date, Starmer will tell the CBI conference in Birmingham: “Let me tell you: the days when low pay and cheap labour are part of the British way on growth are over.”

Tony Danker, director-general of the CBI, the UK’s largest business lobby group, on Monday pleaded for a looser immigration regime, but the issue is seen by Starmer and Conservative ministers as toxic, particularly in key working-class marginal seats.

Immigration minister Robert Jenrick on Monday said: “Our ambition is to reduce net migration. We think that’s what the British public wants — that was one of the driving forces in the votes to leave the European Union back in 2016.”

Starmer will in his speech set out a migration plan under which “any movement on our points-based system — whether via the skilled occupation route or the worker shortage route — will come with new conditions for business.

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

Labour has been on a charm offensive with British business, seeking to take advantage of concerns among many executives over the political and market turmoil sparked by the Tory leadership race and Liz Truss’s ill-fated “mini” Budget.

While chancellor Jeremy Hunt was last week criticised by business groups for not announcing a strong policy to boost growth in the Autumn Statement, Starmer will say Labour would make this a priority.

“I’ll put it simply: every business in this room has a strategy for growth. A nation needs one too,” he will say.

Prime minister Rishi Sunak vowed in his speech at the conference on Monday to “fire up the innovation engine” of the UK, pledging support for innovative businesses and entrepreneurs.

Sunak said the UK would implement the “world’s most attractive visa regime” for entrepreneurs and skilled tech workers.

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

Hunt last week committed to maintaining levels of government R&D spending but shocked the start-up community by slashing widely used tax allowances, which have helped boost innovation. Sunak did not address this move but pointed to improved R&D tax advantages for larger companies.

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

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

Sunak also committed to setting out plans to help energy-intensive businesses cope with rising gas and electricity bills; government support is due to end in March next year. But he said any help would be targeted at companies most in need.

“We recognise a particular issue with a group of industries who are very reliant on energy that we need to make sure we have a plan for and you can expect the chancellor to address that.”

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