It's important for clubs to sign English players because it helps the English game in general.
If a Premier League club pays £5,000,000 to buy a player from abroad, that money's left the English game, and is unlikely to come back.
If a Premier League club pays £5,000,000 to buy a player from the Championship, the Championship club can spend it on players from League One, and so on, so the money stays in the English game and trickles down to smaller clubs. Smaller clubs often survive by developing young players and selling them on. This is becoming more and more difficult.