Loss of London’s EU migrant labour poses ‘significant risk’ to UK economy, says report

Overseas European Union nationals living and working in London should be guaranteed the right to stay in the UK as matter of urgency in the national economic interest, according to a cross-party group of London politicians.

A report by the London Assembly’s economy committee says there is “a significant risk to the London and the UK economy” if employers heavily reliant on EU workers from outside the UK lose access to them immediately after Brexit.

The hospitality, construction and health and social care sectors are found to be particularly dependent on EU migrants, who together hold down some 600,000 of London’s five million jobs – 13% of them compared with just 5% of jobs across the rest of the UK.

Drawing on a range of official national statistics along with a recent study from the London Chamber of Commerce and Industry (LCCI), the report says that in 2015 roughly 80,000 employees in London’s accommodation and food services industry were migrants from within the EU and about 88,000 worked in construction.

The committee heard that approximately one in ten NHS workers in London are non-UK EU nationals and that both the NHS and the social care sector, which contains many small businesses, are running high staff vacancy rates which could be exacerbated by restrictions on the free movement of people from the EU.

The six-person committee, comprising three Labour, one Green Party and two Conservative Assembly Members, urges the government not to use EU nationals as a “bargaining chip” in its Brexit negotiations and asks for a “transitional period” to enable “sectors vulnerable to the short-term risk of losing access to EU labour” to adjust.

It also states that “a fast-track visa system for skilled EU workers is critical for London” and that “significant long-term investment” is required from the government if businesses are to recruit more UK workers to make up for a loss of EU employees in the future. Arguments for devolving immigration policy are set out along with the assertion that “a new immigration policy incorporating visas for EU migrants will have to be introduced”.

Committee chair Fiona Twycross said that the EU referendum result has caused “a great deal of uncertainty for residents, workers and businesses” and that a so-called “hard Brexit” could push some sectors “to the cliff edge”. She added that anyone hoping that social care staffing levels could be easily maintained “can forget it, basically”.

The committee heard from Ufi Ibrahim, chief executive of the British Hospitality Association, that many small and medium sized businesses in her industry in London “would not survive” because rapid expansion in this area created an immediate need for labour. Another contributor, David Lutton of business group London First, said that half of London’s “top tech start-ups were founded by non-British nationals, coming from the EU”.

The report was welcomed by the LCCI, which repeated its fear that London might lose close to £7bn a year and the UK £2bn in tax receipts unless EU nationals and their employers are reassured about their legal status as Brexit approaches. It also believes that London’s Mayor should have a continuing role in advising Whitehall about the needs of the capital’s businesses regarding EU nationals. It considers this a step further than the co-ordinating role recommended in the economy committee’s report.

The report’s publication follows Mayor Khan releasing data from a new housing study yesterday, which put the number of non-UK EU nationals currently employed in construction in London at 95,000 or 27% of the total. The mayor said: “A ‘hard Brexit’ could leave a quarter of the skilled construction workforce in the capital high and dry, which would have a crippling effect on our plans to build the homes Londoners so desperately need.”

The London Assembly economy committee’s EU migration report  is here (pdf).




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