Cheap labour from abroad is damaging economy, says IDS report

NEGLECTING Britain’s unskilled workers and relying on cheap labour from abroad have damaged productivity, a report warns today.

The country’s sluggish rate of growth is due to a lack of training of the bottom 20 per cent of unskilled workers, the Centre for Social Justice says.

Report author Iain Duncan Smith said a reluctance to invest in training a generation of British workers had led to an overreliance on cheap labour.

The former work and pensions secretary called on the Government to invest in training or face no rise in living standards.

‘To kick-start UK productivity, business has a role to play in upskilling their workforce and investing in innovation,’ he said.

‘The arrival of cheap labour en-masse has been damaging to the UK economy’s long-term prospects. We now face a set of challenges; most important of these is Brexit. If we are to turn this challenge into an opportunity, we must redouble our efforts to reverse these damaging trends.

‘We must act now to invest in our people, invest in technology and secure our

‘Next task is to raise living standards’

place in the most cutting-edge industries or risk living standards falling for decades to come.’

British businesses have been shorttermist, opting for cheap labour rather than investing in the existing workforce and in new technology, the report warns.

It condemned the wasted potential of the low-paid and low-skilled sectors, which are the least productive, at a time when technology is advancing. The report added that Britain required a higherskilled UK workforce to master new technology, analyse more data and communicate with people around the world.

The report by Mr Duncan Smith, economist Gerard Lyons and several top business leaders, found the bottom 20 per cent of the workforce had suffered most.

It said a lack of investment by business and poor education had prevented British workers, often from disadvantaged backgrounds, making the most of their natural abilities.

Mr Duncan Smith warned that while many unskilled workers still had jobs, wages had barely increased in the past ten years. ‘The next task is to raise living standards by boosting productivity across the low-skilled demographic,’ he added.