Yahoo Finance New Visa rules are putting politics ahead of growth
“This does not mark the end of the road in our plan to cut migration,” the Home Secretary declared last week as latest visa figures were published, “there is more still to come.”
His intervention follows a raft of recent changes to our visa rules and immigration system which will have far-reaching consequences as labour shortages and recruitment challenges continue to bite for many businesses.
Last month, the Government hiked the standard salary threshold for skilled worker visas by almost 50% to £38,700 as it published new ‘going rates’ for international workers.
Huge swathes of talented individuals across health & social care, housebuilding, engineering, renewable energy, education and creative industries will be denied the opportunity to contribute to our economy because they do not earn above the UK average. This is already leading to some firms revoking job offers to overseas graduates, exacerbating the difficulties that many employers face when trying to fill specific roles.
Here in London, the move comes as our latest research indicates that half of employers are struggling to fill vacancies. Not only will this adjustment make it harder to hire for many, it will also impact our pipeline of future leaders. Analysis from the Entrepreneurs Network published last summer found that 39% of the UK’s 100 fastest-growing companies had overseas-born founders or co-founders, drawn from 28 countries and five continents.
International talent brings fresh perspectives, ideas and ways of working, aiding a cultural dynamism which helps attract 30 million visitors, and £14 billion in tourist spend, to the capital annually.
On top of changes to the skilled worker visa there has, in recent weeks, been a 50% rise in the salary required to bring a partner from abroad to the UK to £29,000. Law firm Harbottle & Lewis now describes our restrictions in this area as “among the harshest in the world”.
Elsewhere, the Home Secretary has ordered the Migration Advisory Committee (MAC) to review the future of the Graduate Visa, a route which enables international students to stay in the UK after successful course completion at a cost of around £3,000. The visa was only introduced three years ago, as part of a 2019 International Education Strategy which sought to grow the value of UK education exports to £35bn annually.
When we surveyed a cross-section of BusinessLDN members about the Graduate Visa earlier this year, half of participants said they have hired an employee through the route and the same proportion plan to do so over the next year. Meanwhile the MAC has warned that it has not been given sufficient time to conduct an effective review of the visa.
It’s absolutely right to clamp down on illegal immigration and provide firms with the support they need to nurture domestic talent. That’s why we bring together employers and educators to better align training supply with demand through our London Local Skills Improvement Plan. But it’s also vital to support the massive economic contribution of international employees, business owners and students.
With UK growth stagnating, policymakers should be working with businesses to develop a fair immigration system which bolsters that contribution. Instead, they’re focusing on arbitrary net migration targets.
The new skilled worker visa salary threshold must be monitored very closely, and adjusted if there is clear evidence it is worsening skills shortages. The same goes for the new Immigration Salary List.
The Government should also reintroduce some certainty for our higher education sector with a recommitment to the 2019 International Education Strategy, including the Graduate Visa as an important driver of economic activity. We’re also encouraging policymakers to launch a thorough review of existing visa fees and health surcharges.
Politicians of all stripes like to vaunt the importance of growth and economic dynamism. If they’re serious about attaining them, we need a reset: moving away from short-term, erratic policymaking and towards long-term planning which puts economics ahead of politics.
Mark Hilton is Policy Delivery Director at BusinessLDN
