Sir Keir Starmer has said his planned shake-up of training in England will reduce the need for firms to hire from abroad.
In a speech, the prime minister said a lack of workplace skills had made the UK reliant on “higher and higher” levels of immigration.
Labour is likely to face public and political pressure to reduce legal migration from record highs in the wake of Brexit.
It does not have an overall migration target, but wants to cut demand for overseas hires by more strongly linking training with migration policies.
Ministers want a new government body, Skills England, to work with other advisers to plug “skills gaps” in key sectors.
But the agency is expected to take up to a year to set up, and Sir Keir acknowledged his approach would not provide a “quick fix”.
Under Labour’s plans, Skills England will work more closely with official migration advisers to develop training plans for sectors that are currently reliant on immigrants to fill roles.
Speaking at the Farnborough International Airshow in Hampshire, the prime minister blamed an “over-reliance” on migration on a lack of training opportunities for young people.
He added he did not want to criticise businesses that hire from overseas, but a lack of a “coherent” skills system was robbing Brits of “dignity of work”.
“We won’t be content just to pull the easy lever of importing skills. We’re turning the page on that,” he added.
However, he declined to put a timetable on how quickly the policy would take to reduce migration, adding he did not want to establish an “arbitrary date”.
Pay demands
He also admitted that higher salaries would also be required to reduce foreign hires, adding: “An element of that will be about pay, of course.”
He cited Labour’s plans for collective pay bargaining in the social care sector, one of those most reliant on overseas workers, as an example of what his new government was planning to find to find the right “balance” on wages.
However, the party faces a tough background on public-sector spending.
Independent pay review bodies have recommended 5.5% rises for teachers and certain NHS staff, more than the Treasury had expected, with recommendations for other sectors also due in the coming weeks.
Before the election, Labour pledged to make it harder for companies that refused to comply with training plans to hire workers from abroad, although detailed plans have not been published.
Net migration to the UK was 685,000 last year, down from the record 745,000 in 2022 but still higher than any year before Brexit.
Work visas granted in the last two years have grown sharply, largely as a result of an expansion in the healthcare worker route under Boris Johnson.
But whatever the effect of Labour’s skills policy, experts predict the migration figure for 2024 is likely to be lower due to changes in salary requirements announced last year.
Apprenticeship funding
Under Labour’s plans, Skills England is also due to take on new responsibilities for deciding the future direction of skills training.
The body will decide which courses should be able to benefit from funding currently reserved for creating apprenticeships, paid jobs that allow recruits to gain experience in the workplace alongside training or study.
Labour wants to let eligible firms use up to 50% of this cash to fund other types of training, in a bid to make companies more responsive to skills demands.
Labour argues the existing apprenticeship levy, introduced by the Tories in 2016, has resulted in a fragmented system and a low-take up from employers.
But the Conservatives have warned that the plans to redirect cash could slash the number of apprenticeships on offer and reduce options for younger people.