The impact of migration in the UK economy
Brexit denotes restrictions in immigration and a closure of the British borders to migrants.
The result of the Brexit referendum has already had an impact in immigration and the UK’s economy even if no specific measures have been implemented yet and the negotiations appear to be somewhat at a standstill.
It appears that a crisis may be looming on the business parks, industrial estates, construction projects and farms of Britain. As the Brexit process dominates politics businesses are struggling to fill vacancies and to find the people they need in order to grow.
In some sectors firms report that labour shortages have reached critical levels. A combination of record employment levels for UK-born people, significant falls in immigration following the devaluation of sterling in 2016, and the total absence of job candidates in some areas is at the root of the problem. British Chambers of Commerce surveys show nearly three-quarters of firms trying to recruit are experiencing difficulties. This is the highest level since records began over 25 years ago.
The reality is that amidst political uncertainty British businesses are unable to wait for a clear UK immigration policy to emerge and meantime job vacancies at all levels are being left unfilled, damaging businesses and the economy. Many firms report to be investing long term in the training and development of their workforce. This will take years to deliver results especially for highly skilled roles. Such gap in the supply of skills and labour will pose difficulties for the continuation of business.
British Chambers of Commerce surveys show that only a small percentage of businesses recruit outside the UK for reasons of cost. It seems that overall businesses are more likely to try to address skills shortages locally in the UK. However, firms in specific areas such as agriculture and personal care, advertise overseas because they fail to recruit local workers to do the jobs on offer.
These skills gaps negative impact in these sectors will only worsen if the Tier system used for non-EU recruiting is expanded across the board. This would damage UK firms’ competitiveness, and cause some to disappear especially in fields such construction, agriculture, NHS and care homes and even services and hotels. As the prime minister herself has repeatedly noted, workers of all skill levels from Europe play a huge role in the success of British businesses and communities.
A Home Office spokesperson said: “It is important that our immigration system works in the national interest, ensuring that employers look first to the UK resident labour market before recruiting from overseas.
“The tier 2 visa route is intended to fill gaps in the labour market with labour from outside the EU. When demand exceeds the month’s allocation of tier 2 (general) visas, priority is given to applicants filling a shortage or PhD-level occupations. ”
“The published shortage lists include a range of medical professionals, including consultants specialising in clinical radiology and emergency medicine, and we estimate that around a third of all tier 2 places go to the NHS.”
The cap on skilled workers from outside the EU operates on an annual quota of 20,700 with a fixed number of spaces available each month. Until December 2017 the monthly quota had only been exceeded in one month since the cap was introduced by Theresa May as Home Secretary in 2011. Britain hit its cap on visas for skilled non-European workers for an unprecedented third month in a row, from December 2017 deepening the staffing crisis facing the NHS and other key employers.
More than a third of the tier-2 work visas issued by the Home Office go to medical and other staff recruited to work in the NHS. Migration experts expect that among the first group to be turned away will be doctors and other healthcare staff, software developers and scientists.
The next set of quarterly immigration figures for 2018 is being prepared at present. They are expected to show increasing evidence of a “Brexodus” over the past year, with an accelerating decline in the numbers of EU nationals coming to work in Britain while increasing numbers return home.
Additionally, the Home Office sent out hundreds of emails to UK employers and businesses last week telling them that their applications for the certificates of sponsorship required to recruit mostly highly skilled workers from outside the EU had been refused because they did not meet the minimum points score set for the February quota.
The Home Office confirmed that the minimum salary for a job to qualify for a skilled work visa was normally £30,000, or £20,800 for a graduate recruit. However, in December 2017 it was set at £55,000 and in January tier-2 visa applications for jobs paying less than £46,000 a year were refused unless they were PhD-level roles or were for jobs on the official shortage occupation lists.
The points-based immigration system prioritises applicants according to their advertised salary, with the minimum annual pay changing according to the number of applicants above the quota and their points rating. This hits the NHS particularly hard.
It appears that urgent measures are required to allow an adequate work force from both within and outside the EU to occupy positions, which otherwise will be deserted. Failure to do this will be detrimental to essential services needed by UK residents will seriously damage the British economy.
LUPINS comprises a team of highly experienced immigration lawyers offering representation and advice on all aspects of UK immigration and nationality law. If you have any questions relating to living and working in the UK don’t hesitate to contact our experts on 0203 503 0880 to speak to one of our specialists.