British PM Liz Truss may lift immigration cap to fight labour shortage

Plans to introduce more tax cuts next year as part of first full Budget

British Prime Minister Liz Truss is set to launch a major review of the country’s visa system in a move to tackle acute labour shortages in key industries, the Financial Times reported on Sunday.

Truss also plans to introduce more tax cuts in the new year, adding to reductions announced this week, The Telegraph reported without saying where it obtained the information. 

The prime minister is set to defy some of her anti-immigration cabinet colleagues by making changes to the “short age occupation list”, allowing certain industries to bring in more staff — such as broadband engineers — from overseas, the newspaper said. The review could also endorse a loosening of the requirement to speak English in some sectors to enable more foreign workers into the country, the report said, citing a Downing Street official.

The new tax cuts will include further reductions in income tax and discounts for savers and child benefit claimants and are likely to be announced as part of a full Budget next year, the newspaper said. Chancellor of the Exchequer Kwasi Kwarteng announced on Friday a tax review, alongside the biggest reduction in taxes by a budget since 1972. 

Treasury officials are drawing up a list of “pinch points” that discourage Britons from earning more, as part of the review of the tax system, according to the report. 

Further tax cuts could add to pressure on the pound. The £220 billion policy blitz announced on Friday sent the pound crashing below $1.11 for the first time since 1985 and drove five-year gilts to their biggest ever daily decline. 

A review of the lifetime and annual allowances on pensions, which currently encourage employees to retire early to avoid a “tax trap,” could benefit as many as 1.6 million savers, The Telegraph said. Workers who earn more than £100,000 would also be given a full income tax personal allowance, amounting to a tax break worth up to £5,000 a year for the highest earners, according to the report.

Ministers are also considering doing away with a charge for those who make more than £50,000 and claim child benefit, the newspaper said. 

Asked about the idea that immigration rules might be relaxed, UK finance minister Kwasi Kwarteng told the BBC on Sunday, “It’s not about relaxing rules. The whole point about the Brexit debate if we want to go down there was we need to control immigration in a way that works for the UK.” Asked if more occupations would be added to the list of people who could come in, Kwarteng said that the interior minister would give an update in the coming weeks, as he had flagged on Friday.