Brexit backer says 'unlimited' migrant labour means some firms stopped training
Some British firms have given up on training their staff because of the "unlimited" supply of migrant labour from the European Union, a leading business figure in the Brexit camp said.
Former British Chambers of Commerce director general John Longworth said the UK risked becoming a "low wage, low skilled, low productivity economy" because of EU free movement rules.
But Business for New Europe chief Roland Rudd warned Brexit would be "devastating" for trade and claimed Vote Leave's immigration policy would impose extra red tape on firms.
Mr Longworth, chairman of Vote Leave's business council, told MPs on the Business, Innovation and Skills committee, that the UK's immigration policy was "the worst of all worlds".
He said: "One of the things that concerns me about immigration, and I had this discussion with the governor of the Bank of England a number of times last year, was about the downward pressure on wages in the UK which, at this point in the economic cycle, should be rising now.
"I think, for people in the country, that's one of the big concerns.
"Secondly, I think it's having an impact on skills training. We have over half a million unemployed under-25s, which is a national scandal.
"A lot of corporates really gave up training. If you've got an unlimited supply of cheap labour from the EU, you don't really need to bother training people.
"Thirdly, you don't get productivity improvements unless you invest in businesses and if you can operate off cheap labour that is actually a problem.
"So there are potential directional issues there where the economy is moving towards a low wage, low skilled, low productivity economy, which is exactly what we don't want."
He added that current policy was " the worst of all possible worlds" because EU migration meant " we can't get access to the skills we need because we can't get access to the rest of the world because the overall migration figure is too high, the public believe it is too high, and it is putting a strain on public services".
"So we have the whole migration policy out of kilter and we can't resolve that problem while we are members of the European Union, because we have no control over migration from the European Union."
But Mr Rudd said: "I think people realise that actually there have been benefits. Yes, there are concerns about social services which need to be dealt with, but there are benefits and we shouldn't lose sight of that.
"The benefit for the economy has been enormous."
The Australian-style points system favoured by Vote Leave would "create another regulatory burden for business" and he said the Brexit camp had not given any idea of how many migrants they think the country would need.
Asked what the effect of Brexit would be on boosting exports, he said: "I think it would be devastating. I cannot think of any problem that the solution is a recession. It's just simply not going to help."