The government’s post-Brexit immigration plans will stifle London’s economy due to restrictions placed on overseas workers earning less than £30,000 a year, an influential business group has said.
The new visa system, which would prevent firms employing workers under the income limit for more than a year, would particularly affect the accommodation and hospitality sector as 83 per cent of workers earn less than £30,000 and 33 per cent are European nationals.
According to analysis by the Confederation of British Industry (CBI), 46 per cent of London workers have an annual salary of less than £30,000, and the average median wage is only slightly higher at £32,976 a year.
CBI London regional director Eddie Curzon said: “We know that London businesses are creating jobs, but many are already struggling to fill vacancies and suffering from skills shortages.
“Continued access to overseas workers after Brexit is vital to drive growth, innovation and prosperity in London. The Government’s current proposals risk causing significant harm at a time of uncertainty for business.
“A one-year limit on workers earning less than £30,000 would encourage firms to hire a different person each year, needlessly increasing costs and discouraging migrants from integrating into communities.
“Leaving the EU should be an opportunity to develop an independent immigration policy that works for business by being both open to allow our economy to grow and controlled to restore public confidence.”
City A.M. has contacted the Home Office for comment.
The latest findings come after analysis by pro-Freedom of Movement group Global Future found that the government’s visa plans would also cost employers more than £1bn by 2025 due to red tape.
Business groups and politicians slammed the proposals and urged the government to avoid placing additional cost burdens on companies after Brexit.
Liberal Democrat home affairs spokesman Ed Davey said the plans were the “biggest red tape threat British businesses have ever seen”.
A Home Office spokesperson said: “We are confident the future immigration system will support London’s businesses, for example, by removing the caps on the number of work visas, reducing the skills threshold, abolishing outdated labour market tests and bringing in a new digital sponsorship system to cut processing times.
“We are engaging with businesses on the £30,000 salary threshold but in any event, there is likely to be a lower rate for occupations that the independent Migration Advisory Committee indicates are in shortage.
“Businesses should also be training up Londoners to fill their vacancies, but we recognise they need time to adjust to the new system. This is why there will be a temporary short-term workers route for employers to bring in workers at all skill levels for 12 months, subject to tightly defined conditions.”