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Andrew Sissons
Researcher, Big Innovation Centre
T 020 7976 3609
Andrew  Sissons

British jobs for British workers?

Authors: Andrew Sissons Andrew Sissons

01 July 2011

Yesterday, Iain Duncan Smith was at The Work Foundation explaining his radical plans to tackle long-term unemployment. Today, Iain Duncan Smith is in Spain, and is set to make a far more controversial speech. According to the BBC, The Work and Pensions Secretary will call on British businesses to offer jobs to British workers. He will argue that measures to tackle long-term unemployment must be supported by tougher limits on immigration, to create a “level playing field” for unemployed people.

This isn’t the first time such a message has been aired – Gordon Brown famously pledged to create “British jobs for British workers” – but it is bound to spark a heated debate. Duncan Smith is drawing on statistics showing that only 19% of all jobs created over the last year, and 26% of all new jobs since 1997, went to people born in Britain. The picture is a little less stark if you look at nationality rather than place of birth, with 46% of new jobs since 1997 going to British nationals (you can see these stats in Table 8, on page 28 of the Labour Market Statistics). In Duncan Smith’s view, this is making it hard for unemployed people to get jobs, and must be addressed as a matter of urgency.

But will favouring British workers, and placing constraints on migration, really help to tackle long-term unemployment? This is an evocative issue, but the case is far from clear-cut. Many businesses would argue that they face severe skill shortages, and that their only option is to turn to migrants with the right skills. IBM yesterday wrote to the government, warning that skill shortages had caused them to leave 200 vacancies unfilled. Tightening up immigration policy will not solve skill shortages. At the same time, many economic migrants have filled intermediate or lower-skilled jobs, and this competition has undoubtedly put pressure on workers in many industries.

But in general migration is good for the UK economy, particularly where it involves highly-skilled workers – and Duncan Smith acknowledges this fact. As we argued this week, businesses in a knowledge economy need to have confidence that they will be able to attract workers with the right skills; if these skills aren’t readily available in the UK, they will look to migrants to fill the gaps. If these migrants aren’t able to come into Britain, there is a danger that the firms will instead choose to leave the UK.

In the background of this argument is a far more important debate about the future of the UK economy. The fact is that our economy is becoming more and more knowledge-based, and that means that most of the jobs we create require high-skilled workers. At the same time, many mid-ranking jobs – secretarial work and skilled trades for example – are disappearing, being replaced by technology and leaner processes. For those without the high-skills required, this makes life very uncomfortable.

But there is no point trying to fight this trend towards a high-skill economy. The fact is that most jobs in the UK, whether high-skilled or not, depend on us having a strong knowledge economy. Industries such as retail, logistics and support services all feed off activity generated by the knowledge economy; the more jobs we have in this area, the more jobs we have in the rest of the economy. What is most important, as Duncan Smith highlights, is creating opportunities for career progression for workers at all levels of the economy. The Work Foundation’s Bottom Ten Million programme is looking at how we can do just that.

So rather than targeting immigration, the Coalition should focus on two things: creating more jobs for everyone, at all levels; and equipping those trapped in unemployment with the skills and support they need. Adding immigration restrictions is likely to reduce, rather than increase, job opportunities, and might distract the Coalition from tackling the root causes of unemployment.