Businesses uneasy over post-Brexit immigration policy

Business chiefs have reacted with unease over some of the government's proposals for a post-Brexit immigration system, outlined at the Conservative Party conference in Birmingham on Tuesday.

Home Secretary Sajid Javid

Home Secretary Sajid Javid Credit: Jay Allen Copyright: Crown Copyright https://creativecommons.org/licenses/by-nc-nd/2.0/

Although Prime Minister Theresa May and Home Secretary Sajid Javid stressed there would be a priority for high-skilled workers from across the world, they also pledged to cut back on low-skilled migration and to end free movement for workers from the European Economic Area after Brexit.The new policy was broadly in line with recommendations made last month by the government's independent panel of advisers, the Migration Advisory Committee (MAC)."The new skills-based system will make sure low-skilled immigration is brought down and set the UK on the path to reduce immigration to sustainable levels, as we promised," said Mrs May.“Two years ago, the British public voted to leave the European Union and take back control of our borders. When we leave we will bring in a new immigration system that ends free movement once and for all.“For the first time in decades, it will be a country that controls and choose who we want to come here."Mr Javid told the conference: "Britain will be open to the brightest and the best migrants from around the world after Brexit. The new skills-based system will make sure low skilled immigration is brought down and set the UK on the path to reduce immigration to sustainable levels, as we promised.”

The proposed Tory immigration policy proposals include:

  • Priority for high-skilled workers, although there will be minimum salary thresholds to ensure immigrants do not undercut British workers.
  • Curbs on low-skilled migrants, whose jobs are classified as requiring no educational qualifications beyond the age of 16. There will be a separate visa category to allow in seasonal agricultural workers.
  • A new system of e-gates will be rolled out for fast-track access to tourists and business visitors from “low-risk countries”.
  • All security and criminal checks will be carried out in advance of visits, similar to the system already operated by the US.
  • No cap on student visas, but applicants will be required to have a command of English.

What does the CBI say about the government's proposed immigration plans?

Carolyn Fairbairn, director-general of the Confederation of British Industry, commented, “Freedom of movement is ending and firms understand that. But the prime minister’s proposals for a new system have taken a wrong turn. By dismissing the importance of low-skilled workers to the UK economy, the government risks harming businesses and living standards now and in the future.

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“All skill levels matter to the UK economy. Today’s proposals risk worsening labour shortages, already serious in construction, hospitality and care. Restricting access to the workers the UK needs is self-defeating.“It is also disappointing that the biggest flaw of the UKs current system – the net migration target – will remain. This target means that every day workers with skills the UK needs are turned away and jobs left unfilled. Employers all over the UK will continue to urge its abolition to show the world Britain means business. “Whatever the White Paper says, firms of all sizes and sectors will need enough time – at least two years from the moment of change - to adjust to the new system.”

Jill Rutter, of the Institute for Government think-tank, warns of complications

Jill Rutter, programme director at the Institute for Government think-tank, warned the proposals could be "much more complicated" for businesses.She told BBC Radio 4's Today programme, "So at one level it will be simpler in the sense that the rules will be the same for EU and non-EU, but at another level and, if you are a business, it will be much more complicated because while we've had free movement from the EU, basically a lot of businesses just need to check somebody's got an EU passport."(Now) you are going to bring an awful lot of businesses into dealing with the Home Office. So for them it's a lot less simple."

Institute of Directors recommends that a preferential deal with the EU must be on the table

Stephen Martin, director-general of the Institute of Directors (IoD), said, “While the government may be ending free movement as we know it, a preferential deal with the EU on what replaces it simply must be on the table."The principle of treating all countries equally is laudable. However, in practice our close geography and interwoven supply chains make continued access to EU talent an urgent matter for British businesses. This is not an unusual approach, as is reflected in the Common Travel Area, the Nordic passport union and the trade accord between Australia and New Zealand – to name but a few examples.“Access to our labour market is no doubt attractive to other countries and it makes sense that this should factor into negotiations as the UK seeks access to the European market. But the prime minister must keep in mind the benefits a deal would bring British firms, too."

The hospitality industry will be greatly impacted

Neil Pattison, director of the Caterer.com, the UK’s largest hospitality job board, added, “The proposed introduction of a new skills-based immigration system will vastly impact the hospitality industry. As it stands the industry does not have enough workers to do the jobs currently available in the market."While more work needs to be done to close the skills gap and ensure that British people have the right pathways into the hospitality industry, restricting workers from overseas is not the solution."The catering and hospitality industries are set to be some of the most affected by Brexit and we have already seen a reduction in applications from the EU. We need to be focusing our efforts on ensuring the longevity of businesses in this sector.”

Any restriction on admitting lower skilled workers will need to be phased in gradually

Immigration lawyer Kathryn Bradbury, a partner Payne Hicks Beach, commented: "It is incorrect to suggest that leaving the EU/EEA is the only way to control immigration. The UK has always been able to control immigration from both within and outside the EU/EEA."When the A8 countries acceded to the EU in 2004, it was possible to apply restrictions for seven years post accession, and the UK did not. Furthermore, EU/EEA nationals coming to the UK who do not work after their first three months can be required to leave under the EU Treaties and Directives."Whilst it is fair to suggest that employers need to train British workers for lower skilled roles, that takes time. The recently introduced apprenticeship levy imposed on large employers has not increased the number of apprenticeships. Any restriction on admitting lower skilled workers will need to be phased in gradually and consideration needs to be given to lowering the skill level for Tier 2 visas, as recommended by the MAC."

Proposals from Conservative party conference 'disappointingly predictable'

Also responding to the day's discussions, Andrew Osborne, head of Lewis Silkin’s immigration practice, said: “The immigration proposals coming out of the Conservative party conference are disappointingly predictable."They broadly follow the recommendations made earlier this month by the MAC. The MAC suggested that while EU migration does not have a detrimental impact on the UK economy, the positive impacts are negligible and can only really be seen by migration into higher skilled jobs.“It was little wonder then to hear the Prime Minister announce curbs on lower skilled EU migration. While a more global approach – giving equal status to individuals coming from, say, India and the EU – would be on the whole a progressive move, the reality is many employers, particularly in the retail, hospitality and construction industries rely heavily on EU labour."They will be disappointed with the government’s approach which somewhat skates over the complexities involved with a rebalancing towards a reliance on UK resident workers. As the Brexit cliff edge looms, time is a precious commodity and many companies will be getting very nervous that they will not be able to source the staff they need.”
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