London business groups give lukewarm response to migrant salary threshold recommendations

London business groups give lukewarm response to migrant salary threshold recommendations

Organisations representing London’s business sector have given only a qualified welcome to a report by a government advisory body which recommends that the salary threshold for people wishing to come to the UK to work should be lowered to allow more of them in.

The Migration Advisory Committee (MAC) said the pay bar currently applying to potential employees outside the European Union should be brought down from the government’s preferred £30,000 across the board post-Brexit to £25,600, saying this would particularly help with recruiting teachers and skilled NHS staff.

However, Jasmine Whitbread, chief executive of London First, said the MAC “should have gone further” by recommending a reduction of the threshold to £20,000, which “would have ensured we could keep the economy at full strength”, while Sean McKee, director of policy and public affairs at the London Chamber of Commerce and Industry (LCCI), said that while “businesses will be encouraged” by the MAC’s proposal, “some will still question whether the newly-proposed figure is low enough”.

Both organisations have consistently argued that new rules designed to reduce inward migration from overseas should not damage the capital’s economy, which produces close to one quarter of the UK’s entire economic output and generates billions in taxes that are spent in other parts of the country.

A 2017 report published by London First and PwC drawing on figures from the Office for National Statistics found that large percentages of London workers in the construction, creative, financial, transport, retail and hospitality and wholesale sectors as well as the NHS were born overseas.

While describing as “positive” the MAC’s recognition that a £30,000 limit would “decimate key sectors such as construction, hospitality and social care” Whitbread argued that the report clear that a future immigration system that clamps down too heavily on unskilled workers will hit total GDP”. She added: “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.”

For the LCCI, McKee emphasised that “As a global city, London has a greater reliance on international workers than the rest of the UK,” and expressed regret that the MAC does not recommend that regional variations in the salary threshold should be adopted, as the LCCI and others have advocated. McKee also raised “a point of concern” over the recognition by MAC chair Professor Alan Manning that it remains difficult to obtain high quality data to inform the government’s migration system.

In its report, the MAC estimated that the impacts of its recommendations would “vary across the regions and countries of the UK, with the largest predicted impacts in London, driven by the greater share of migrants living and working there”.

However, it concluded that “a different salary threshold for each region and country of the UK would be too complex and many of the salary thresholds would be similar as, with the exception of London, salary variation is limited.”  The committee calculated that a separate salary threshold for London would be “about 25 per cent higher”.

Manning described characterisation by Prime Minister Boris Johnson, a former London Mayor, of the new migration rules his government wishes to bring in as an “Australian-style points system” as a “soundbite” whose true meaning is unclear.

The day before the MAC report came out, home secretary Priti Patel criticised British businesses for relying too heavily on “low skilled cheap labour” from the EU, and has since stressed that the committee’s findings are only advisory and that “We are committed to ensuring we have a system that has the ability to level up across the whole of the UK in a way that immigration policy has failed for too long”.

Photograph by Omar Jan. is dedicated to providing fair, thorough, anti-populist coverage of London’s politics, development and culture. It depends on donations from readers and would like to pay its freelance contributors better. Can you spare £5 (or more) a month? Follow this link if you would like to help. Thank you.







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