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UK firms fear staff shortages and red tape from Brexit migration plans

Tom Belger
Finance and policy reporter
Prime minister Boris Johnson and home secretary Priti Patel during the election. Photo: PA

UK business leaders have welcomed proposals to lower a controversial salary cap to £25,600 ($33,321) for migrant workers coming to fill jobs in the UK.

But firms still fear staff shortages in some sectors where employers already struggle to find workers.

Some also fear increased bureaucracy and costs, with firms in sectors like food and drink used to employing migrants without the need for visas under EU free movement rules.

A spokesman for prime minister Boris Johnson said he would “carefully consider” a new report by the government’s migration advisory committee published on Tuesday.

It had been asked to review the £30,000 minimum salary threshold for migrants with job offers and a potential “Australian-style” points-based system after Brexit.

READ MORE: UK government told to lower controversial salary cap

The committee recommended a points-based system only for migrants without jobs, with a cap on total numbers.

It said migrants should receive points based on their qualifications, age, language skills and priority areas for the government such as science, maths, engineering, technology or creative skills.

A separate visa route should be kept for medium- and high-skilled migrants with job offers already, the committee said. This should not be based on points, but should retain a minimum salary floor based partly on the industry.

It said the list should be expanded to add trades such as carpentry, plastering and childminding, but waiters and workers in “fishing and other elementary occupations” should be removed.

Lower salary cap welcomed by firms

The government 'should lower its salary cap.' Photo: PA

Jasmine Whitbread, chief executive of business lobby group London First, welcomed the proposed £4,400 lowering of the salary cap for skilled migrants with job offers.

She said the committee had “met business halfway,” recognising that the previous £30,000 floor would “decimate key sectors such as construction, hospitality and social care.”

“But it should have gone further... around £20,000 would have ensured we could keep the economy at full strength,” said Whitbread.

Tim Rycroft, chief operating officer of the Food and Drink Federation (FDF), also called the lower cap “a step in the right direction.” But he agreed the government should go further, basing salary floors only on the “going rate” in the industry.

READ MORE: Government tsar warns EU migration curbs could fuel people smuggling

Mike Cherry, national chairman of the Federation of Small Business (FSB), said the lowering of the cap would “widen the scope for employing those beyond highly-paid professions.”

He said four in five small firms hiring for “mid-skilled” roles were paying less than £30,000.

Firms fear a struggle to recruit staff

Fears remain the two key routes for migrants with and without jobs could still leave firms struggling to recruit in certain sectors.

Cherry said the points-based system must also be “open to mid-skilled workers,” with how points are allocated still to be decided. The government is also still deciding on a temporary route for low-skilled workers.

Matthew Fell, chief UK policy director of the Confederation of British Industry (CBI), said it remained “unclear how firms can hire for mid-skilled roles such as LGV drivers, joiners and lab technicians” earning under £25,600.

An even lower pay threshold and a “flexible route” for temporary workers were needed to prevent staff shortages, according to Tom Hadley, director of policy at the Recruitment & Employment Confederation,

“Skills shortages are one of the biggest problems facing the UK economy. We need an immigration system that can solve this,” said Hadley.

Dr Terry John, international committee chair of the British Medical Association (BMA), said: “The NHS and social care system relies on a wide range of staff, including porters, cleaners and care workers, to ensure they can provide care to patients, and many of these would still be excluded by a threshold despite its reduction.”

Fears of bureaucracy and ‘expensive legal fees’

“The overriding concern for business is bureaucracy. The government must ensure that whatever plans it takes forward, firms aren’t faced with a byzantine system when they need talent to grow,” warned Edwin Morgan, policy director at the Institute of Directors.

Rycroft of the FDF said around 95% of its food and drink manufacturing members surveyed currently employed EU workers without needing visas.

He said the new system had to be “accessible” for firms navigating Britain’s immigration system for the first time to meet staffing needs.

“Many of these will be small or medium sized businesses who are unable to afford expensive legal fees and the new system must be streamlined to reflect this,” added Rycroft.

Firms need ‘time to prepare’

Whitbread of London First sounded the alarm over the government’s plan to roll out the changes swiftly from January 2021.

“Firms across the capital and beyond want to support the roll-out of the new points based system, but must have a seat at the table as it is finalised and be given time to prepare for changes,” she said.

Morgan added: “Implementing a new system and adapting to it will be a race against the clock for both government and businesses.”

READ MORE: Adopt business-friendly immigration policies, businesses say

The committee itself urged the government to make a decision quickly to give employers time to adjust.

Cherry of the FSB added: “The challenge now for the government will be to have a new, employer-responsive immigration system in place in time for the end of the transition period eleven months from now.”

What the government says

A Number 10 spokesman said: “The government will introduce a firmer and fairer points-based immigration system from 2021 that welcomes talent from around the world while reducing low-skilled migrants and bringing overall numbers down.

“We will carefully consider the report before setting out further details on the new system.”