UK industry must wean itself off “immigration dependency” and “cheap labour”, Sir Keir Starmer told business leaders on Tuesday.
Britain needs to move the economy away from its “low-pay model” and invest in training workers, the Labour leader said.
During a speech at the annual CBI conference he warned bosses they must “bring forward a clear plan for higher skills and more training” as well as “better pay and conditions”.
In his pitch to businesses, Sir Keir said his party will make the current points-based immigration system - brought in after Brexit - work better for companies.
But he added that bosses must have a plan to develop skills, increase pay and negotiate with trade unions.
“The days when low pay and cheap labour are part of the British way on growth must end,” Sir Keir said.
“This isn’t about Brexit. All around the world, business is waking up to the fact we live in a new era for labour.
“And while they’re adapting, our low-wage model is holding us back. It’s why we’ve set out a new deal for working people that will deliver higher pay, stronger rights and better work.”
He said his party will not ignore the need for skilled workers from abroad, but added: “I want to be clear here - with my Labour Government - any movement in our points-based migration system, whether via the skilled worker route, or the shortage occupations list, will come alongside new conditions for business.
“We will expect you to bring forward a clear plan for higher skills and more training. For better pay and conditions. For investment in new technology.
“We can talk about how this is done – dialogue is at the heart of partnership. Negotiation with trade unions will be part of it.”
The speech comes a day after CBI chief Tony Danker called for immigration rules to be relaxed to solve “vast” worker shortages.
Brexit stopped many European workers being able to easily fill jobs in the UK.
It has resulted in some industries, particularly hospitality, struggling to find staff.
Mr Danker said: “It’s time to be honest - we don’t have the people we need, nor do we have the productivity.”
But addressing the CBI on Monday, Prime Minister Rishi Sunak insisted the UK had “one of the world’s most attractive visa regimes for entrepreneurs and highly-skilled people” in the world.
“The number one priority right now when it comes to migration is tackling illegal migration,” he added.