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Immigration proposals could exacerbate labour shortages

9 July 2019

Team working togetherOver half of UK businesses with staff from outside the UK would be negatively impacted by government proposals for the UK's future immigration system, according to new research.

The government's Immigration White Paper has outlined proposals for new rules to be introduced when the UK leaves the EU. The British Chambers of Commerce (BCC) and job site Indeed have investigated the reaction to these proposals, polling 380 businesses that employ non-UK nationals.

The key findings of the BCC/Indeed report are:

  • 53% say they would be negatively impacted by proposals requiring all skilled migrant workers to earn a minimum annual salary of £30k once the UK leaves the EU;
  • 57% say they would be adversely affected by plans to impose a 12-month work and residency limit on lower skilled migrants, requiring workers to leave the UK for at least a year once their visa had expired;
  • 34% say they would be negatively impacted by an extension of the Immigration Skills Charge to EU nationals. The charge is currently paid by businesses for each migrant worker they recruit from outside the EU.

The report concludes that: "At a time of record low unemployment, when businesses are reporting critical levels of recruitment difficulties, the proposals in the Immigration White Paper would add to the cost and barriers employers face in accessing the skills they need."

The findings also show that many businesses need access to foreign language skills - 23% of respondents say German and Mandarin Chinese will be important to their business in the next five years, and 20% say French and Spanish will be important.

The BCC is calling for immigration proposals that ensure firms in all regions and sectors can continue to access skills at every level, when they are unable to recruit locally.

"When businesses are unable to recruit skills and labour at a local or national level, the UK's new immigration system must allow them to access non-UK workers quickly and cost effectively," said Jane Gratton, BCC head of people policy. "While companies are investing more in homegrown skills, they will continue to need access to migrant skills, at all levels, for the foreseeable future in order to thrive. Salary thresholds and visa restrictions must reflect economic realities."

Pawel Adrjan, UK economist at Indeed, said: "Record high employment and declining interest of European jobseekers in British jobs mean businesses in many sectors are finding it increasingly difficult to hire workers with the right skills. Like in any open economy, migration flows are one way to release that pressure valve but as our survey found, new proposals do not appear to flex and breathe depending on employers' needs."

Written by Rachel Miller.

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