Businesses across the UK have come out in force to strongly reject the government’s latest proposals to slash “low-skilled” immigration after Brexit.
From small firms to nationwide consultancies; builders to tech startups, business owners laid out the potentially disastrous impact of plans to drastically reduce the number of workers entering the UK.
Construction firms said the plans would make the government’s own target of 300,000 new homes per year “impossible” to meet, despite ministers’ pledges to tackle the housing crisis.
Social care providers warned that the system was already on its knees after years of grinding austerity and could buckle without the workers it needs.
Economists said that, in order to tackle a looming shortage of workers, firms would need to look at how they could bring harder-to-reach groups into the labour market, such as people with a disability or ill-health.
The reaction came after Home Secretary Sajid Javid confirmed that EU and non-EU migrants will be treated the same after Brexit, as the government takes a “unique opportunity” to overhaul the immigration system.
The new approach "bring free movement to an end once and for all”, according to Theresa May.
While full details will not be known until the government publishes a white paper this autumn, Mr Javid made clear that migrants deemed highly skilled will be given priority. Under current rules they must be paid a minimum salary of £30,000 - a figure Mr Javid hinted could be reviewed.
Azad Azam, managing director of building firm DPB Ltd in East London, and a member of the Federation of Master Builders, said he was stunned by the government’s stance, which currently classes all building trades as low-skilled.
“We have not met the house building target for 12 years in this country and that’s with free movement of workers,” he said.
Four in 10 of the staff he employs are from the EU, including many from Romania and Poland.
“We were shocked when we heard the plans. I thought that, with housing supposedly being a top priority, there would be an exception for construction workers.”
Mr Azam says he has a contract in the pipeline to build 300 houses near Walsall but if immigration is significantly reduced he simply will not be able to fulfil it.
“It will set us back 10 years. It is bad for every construction business in this country.”
A number of workers he employed from Romania have already had enough of the uncertainty over their future in the UK and have left to go and work in Spain.
Finding British construction workers to replace them is hard, says Azam, whose father settled in the UK in the 1960s after moving here from Pakistan.
“Work that many Asians were brought over here to do, like my dad in a steelworks in Sheffield - that kind of physical labour is now being done by EU migrants. It’s frowned upon by British workers. They don’t want to do it.”
He advertised for an apprentice for four months in the UK and received just three applications. One young staff member he did take on left after just one day, saying, “It wasn’t for me.”
To make matters worse, the visa system soon to apply to all migrant workers under the government’s proposals is a “nightmare”, and will put firms off finding the skills they need, Azam says.
He recently hired two highly specialised stonemasons from India. It took him more than six months to get the relevant permits, just for a three-month project.
“If that is the system for all EU migrants as well it just won’t work. By the time I apply they will have found work in other countries.”
Mr Azam said that while the approach would mean the country had no chance of hitting its house-building target, he was more concerned about a drastic skills shortage in the health and social care - another area the government has pledged fix.
The social care system is strained by funding cuts and an ageing population but the Nuffield Trust said the planned approach to immigration would cause further damage.
Helen Buckingham, Nuffield Trust’s director of strategy, said social care providers are already turning away hundreds of thousands of people who would once have been considered in need of help.
“If we cut off lower paid EU workers without putting in enough money to make social care a sector people in the UK want to work in, more and more people who really need help with the everyday tasks of life will find nowhere to go,” she said.
“Either we address the financial crisis that has pushed social care providers too far into the red to pay decent wages, or we continue to allow migration to fill these gaps after Brexit.”
It is not only companies hiring low-skilled roles that are being hit by falling immigration.
Tobi Schneidler, co-founder of Bouncepad, which supplies secure enclosures for iPads and tablets, said the lack of clarity around immigration had stifled hiring and that he found the government’s approach “extremely frustrating”.
“Uncertainty for businesses is the most poisonous of conditions,” he said, adding that several EU citizens he knew had returned to their home countries because the “atmosphere has soured” since the referendum vote.
His own experience of applying for British citizenship has also been time-consuming and costly.
Despite having first moved to the UK from Germany 26 years ago, he had to pay £5,000 in legal fees, complete an 80-page application form and pass the British citizenship test.
“I’ve lived in the UK and paid taxes here for years, which must have been registered at HMRC, but I had to provide proof of a stable income, which entrepreneurs do not always have.
“The system is an absolute joke.”
Hospitality, which employs around 7 per cent of the UK workforce, is another area in which immigration policy is on a collision course with economic reality.
The government has touted the sector as a potential winner from Brexit. Thanks to the weakened pound, holidays here are cheaper for overseas visitors. But many hotel, bar and kitchen staff will also be considered low-skilled, and millions of them are from the EU, leaving businesses short of staff.
Neil Pattison, director of Caterer.com, a hospitality jobs board, said his customers have already noticed a drop-off in applications while his site has a higher number of open job adverts.
“The competition for talent is already fierce, and a further reduction in migrant labour from the EU will likely push this to a critical level,” he said.
“Should the proposed immigration policy progress, the talent pool in the sector would of course significantly decrease, particularly for the volumes of entry level roles in the sector that are essential for the smooth running of any hospitality business.”
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