The Skills Gap That Wasn't: How Big Business Used Immigration to Avoid Paying British Workers a Decent Wage

A Phrase That Has Done Enormous Political Work

'Skills shortage.' Two words. Uttered with such regularity in boardrooms, business lobby briefings, and parliamentary select committees that they have acquired the status of established fact rather than contestable claim. Britain, we are told, simply does not produce enough workers with the right qualifications to fill the roles that modern employers require. The logical conclusion — reached with remarkable speed by those who stand to benefit — is that immigration must fill the gap.

It is a tidy argument. It is also, in significant part, a fiction constructed to serve interests that have nothing to do with the national good.

This is not a claim about immigration as a social or cultural phenomenon. It is a narrower, more specific charge: that the 'skills shortage' narrative has been systematically manufactured and maintained by employers, universities, and immigration advocates to justify access to cheaper foreign labour, suppress domestic wage growth, and avoid the inconvenient cost of investing in British workers.

The Data Behind the Claim

Let us examine the evidence. The Migration Advisory Committee (MAC), an independent body that advises the government on immigration policy, has repeatedly noted in its annual reports that the relationship between immigration and skills gaps is considerably more complex than employer lobby groups suggest. In its 2023 annual report, the MAC acknowledged that many shortage occupations are characterised not by a genuine absence of available workers but by wages and conditions that make them unattractive to domestic candidates.

This distinction matters enormously. A shortage at a given wage is not the same as a shortage in any meaningful structural sense. If a care home operator cannot recruit British workers at £10.50 an hour with unpredictable shift patterns and poor career progression, that is not evidence of a skills gap — it is evidence of an employer unwilling to compete in the labour market on terms that domestic workers will accept.

The Office for National Statistics' labour market data tells a revealing story. Real wages in health and social care, hospitality, and logistics — three of the sectors most frequently cited as suffering from acute skills shortages — remained broadly stagnant or declined in inflation-adjusted terms throughout the 2010s, even as net migration to fill those roles increased substantially. If a genuine shortage existed, basic economics predicts that wages would rise. They did not. The most plausible explanation is that immigration was suppressing the market signal that would otherwise have prompted employers to raise pay.

Three Sectors, Three Versions of the Same Story

Social Care. The care sector has been one of the most persistent users of the skills shortage argument. Providers have lobbied successfully for care workers to be included on shortage occupation lists, enabling faster visa processing and lower salary thresholds. Yet the Care Quality Commission has documented for years the sector's chronic problems with staff retention, training investment, and management quality. A 2022 report by Skills for Care found that the average hourly rate for a care worker in England was £9.98 — barely above the then-minimum wage — while staff turnover ran at approximately 28 per cent annually. The sector's response to this retention crisis has not been to raise wages or improve conditions. It has been to import more workers.

Hospitality. Post-Brexit, the hospitality industry launched a sustained campaign warning of catastrophic labour shortfalls. Some disruption did occur in 2021. But subsequent ONS data showed that by 2022, hospitality employment had substantially recovered — not primarily through immigration but through wage increases and improved terms in parts of the sector that chose to compete for workers rather than lobby for visa concessions. The restaurants and hotels that invested in their workforce found workers. Those that did not continued to complain of shortages.

Technology. The tech sector presents a more nuanced picture. Genuine specialist skills in areas such as machine learning, cybersecurity, and advanced software engineering are in short supply globally, and some international recruitment is both necessary and appropriate. But the category of 'tech skills shortage' has been stretched beyond recognition to encompass roles that could plausibly be filled by UK graduates if employers were willing to offer training pathways rather than demanding fully-formed specialists from abroad. The British university system produces approximately 25,000 computer science graduates annually. Many struggle to find graduate-level employment in their field. Something does not add up.

The University Dimension

Higher education institutions have been willing accomplices in this narrative. Universities have a direct financial incentive to expand international student numbers — international students pay fees of £25,000 to £40,000 per year, compared to the £9,250 domestic cap — and a corresponding incentive to argue that British graduates are insufficient to meet employer demand. The more successfully they promote the skills shortage myth, the more they can justify both international recruitment and the expansion of degree programmes that command premium fees.

Meanwhile, the practical skills that employers in manufacturing, engineering, construction, and digital infrastructure actually require have been systematically undervalued in the educational hierarchy. Apprenticeship starts fell from 509,000 in 2015–16 to 349,000 in 2022–23, according to Department for Education statistics. The Apprenticeship Levy, introduced in 2017 with genuine ambitions, has been widely criticised for being captured by large employers who use it to rebadge existing graduate training programmes rather than create new vocational pathways.

Britain has chosen, structurally and through a series of policy decisions, to underinvest in domestic skills formation. Having made that choice, it has then used the resulting gap as justification for immigration levels that further reduce the incentive to invest in training. It is a self-reinforcing cycle — and it has suited almost everyone in a position of institutional power.

The Counter-Argument

The strongest version of the pro-immigration labour market case acknowledges wage stagnation but argues that immigration also drives economic growth, increases the tax base, and fills roles that would otherwise remain genuinely vacant, harming service delivery. It further argues that domestic workers are unwilling to take certain jobs regardless of wages, and that cultural factors — not just pay — explain some of the gaps.

These points are not without foundation. There are roles, particularly in seasonal agriculture and some care settings, where domestic supply is genuinely constrained. And immigration's macroeconomic contribution is real. The MAC's own modelling has consistently found net fiscal benefits from skilled migration in particular.

But these concessions do not rescue the broader argument. They explain the case for selective, well-managed immigration to fill specific, demonstrable, time-limited gaps. They do not justify the scale, the permanence, or the structural dependence on imported labour that has characterised British immigration policy for two decades. And they certainly do not explain why the response to a skills gap should always be to import rather than to train, or why wages in shortage sectors have not risen to reflect genuine scarcity.

What Genuine Reform Looks Like

A serious labour market policy would begin by disaggregating the concept of 'skills shortage' into its component parts. Where wages are below market-clearing levels, the answer is wage growth — not visa concessions. Where training infrastructure is inadequate, the answer is investment in technical education, reformed apprenticeships, and employer levy reform. Where genuine specialist skills are unavailable domestically, targeted, time-limited migration with clear conditions is appropriate.

This is not a call for closed borders or economic nationalism. It is a call for intellectual honesty about what the skills shortage argument has actually been used to achieve — and who has benefited from it. The employers who have enjoyed decades of artificially suppressed wage costs have not been the ones paying the price. That cost has been borne by British workers who saw their bargaining power eroded, their wages stagnate, and their government tell them, year after year, that the market had simply decided they weren't worth more.

Britain does not have a skills shortage. It has a political class that found it easier to import workers than to back the ones already here.