There are several ways to avoid employing cheap labour from abroad. One is to employ cheap labour from Britain - lowering wages. Not, I presume, what anyone has in mind.
Another is to employ cheap labour from Britain by the back door. Simply paying higher wages would have several consequences. Businesses would have to pass on the extra costs and raise their prices, which would be bad news for British shoppers. Exporters would likely see customers, deterred by the higher prices, switch to things produced in other countries. So both inflation and unemployment could rise. Again, I suspect, not what anyone has in mind - though it is a scary consequence that could well arise if other plans fail.
Raising real wages requires an increase in productivity. This is not a blinding new revelation. It’s what the Industrial Strategy of Theresa May’s government was all about. It’s what the last Labour government sought with its drive for education, education, and education (echoed today by Johnson’s skills, skills, and skills). The UK does indeed need to solve its productivity problem. Identifying the problem is one thing, but real policies to solve it are another. There’s little sign that the current government really has any fresh ideas. But come on, we’re listening.
