Thursday 10 November 2016

Act now to secure practical immigration for post-Brexit London

- One-off London Visa to grant current EU employees indefinite leave to remain
- New Capital Work Permit system to control future migrant worker access
- Inadequate reform may cost London £7bn economic output by 2020

EU nationals currently employed in London should be issued with a Visa to allow them to remain working in London after Brexit while future access to migrant workers could be controlled through Work Permits according to proposals today from London Chamber of Commerce and Industry (LCCI).

The plans are within a new report; Permits, Points and Visas; securing practical immigration for post-Brexit London underpinned by an economic study from the Centre for Economics and Business Research (Cebr) which found that London's non-UK migrant workers constitute 25% of the capital's workforce, made an estimated £44bn GVA contribution, and paid £13bn taxation revenues last year.

This adds weight to the call by LCCI for the London region to be designated as a 'Targeted Migration Area' and have a dedicated skills shortage list (similar to Scotland's) to manage the capital's significant labour requirements.

Cebr's economic study, commissioned by LCCI, noted that over 771,000 EU nationals are currently employed in a range of sectors such as construction (30% of the London workforce), hospitality and distribution (20% of London workforce) banking and finance (14% of London workforce). In a post-Brexit setting if these nationals had to seek to work under existing Tier 2 immigration visa rules, London would lose 160,000 workers, face a £7bn negative impact on economic output and miss an estimated £2bn direct tax contributions by 2020 as many EU nationals would likely not meet the recently amended requirements on salary thresholds.

To harness their economic contribution and collective experience, LCCI believes Mayor Sadiq Khan should champion a one-off, single issue London Work Visa granting current EU National employees indefinite leave to remain in the UK. The Home Office would decide eligibility (eg: demonstrating employment in London on either the June 2016 Referendum day or the March 2017 Article 50 triggering) to mitigate against a sudden influx of new arrivals.

Overall, Cebr noted London is far more reliant upon non-UK labour than any other UK region with migrants making-up a quarter of the capital's workforce compared to 8% in the rest of the country. Since spring 2014, LCCI Quarterly Economic Surveys, undertaken by ComRes, have regularly found London businesses reporting difficulties finding sufficiently skilled candidates. While recognizing that long-term, the solution to closing the skills gap is upskilling the resident labour workforce, for the foreseeable future, access to non-UK talent will remain critical to the capital's continued success.

To future-proof the London - and wider UK - economy, LCCI believe Mayor Sadiq Khan should consider how Capital Work Permits could meet London employers need for skilled Labour. In line with reformed Home Office immigration criteria, the permits would be issued by a new body - London Work Permit Sponsorship Body - formed by the Office of Mayor and the established main London Business Organisations.

The London Work Permit Sponsorship Body would be licensed as a 'sponsor' by UKVI to act as a broker with London employers on certificates of sponsorship and with non-UK applicants for work permits.

Capital Work Permit holders would only have permission to work within the 33 local authority areas of London. This would be enforced by a prefix added to their national insurance number.

The number of permits granted would be informed through a new Shortage Occupation List for London, a newly defined resident labour market test and an annual London Skills Audit.

Commenting on the new proposals, LCCI Chief Executive Colin Stanbridge said: "Immigration has underpinned London's economic, social and cultural development over centuries, making it the great city it is today. Cebr's analysis reveals the significant contribution that migrant workers make to the modern London economy - indeed they represent one quarter of the workforce. Given their role and input it is vital to London's future that a degree of flexibility is applied if government amends the UK immigration system.

In the approaching post-Brexit scenario, for London to remain competitive, we need to not only recruit the very best but also to be able to identify where we have skills shortages and act swiftly to address these.

Any move by Ministers to usher in a uniform reduction of immigration across the UK must be tempered by practical proposals from those concerned with maintaining London as an attractive place to do business. LCCI today is suggesting practical ways to secure practical immigration for post-Brexit London".

The LCCI report five full recommendations are:

• The Mayor of London should champion a single-issue 'London Work Visa' granting 'indefinite leave to remain' to reassure current EU national employees and their London employers.
• The Government should consider Targeted Migration Area designation for the London Region within the UK Immigration system.
• The Government should task the Migration Advisory Committee with maintaining a 'Shortage Occupation List for London' to attract the skills and talent necessary to ensure the long-term sustainability of the capital's economy.
• The Mayor of London should explore the potential for a dedicated 'Capital Work Permits system' to provide controlled access for future migrant workers and meet London employers' need for skilled labour.
• The capital's established business organisations (eg: LBAC) and the Office of Mayor together could seek UKVI licensing as the Work Permit Sponsorship body for London Region.

Cebr Partner and internationally renowned economist Vicky Pryce said: "Our research shows that London is unique in terms of its high dependence on migrant workers across a range of occupations - both low skill and high skill. There is very little evidence to suggest that businesses will be able to fill skills shortages in the absence of migration, particularly in sectors such as construction where there has been a decline in the number of young British people taking apprenticeships. It would take years to train up the required workforce domestically, yet there are immediate needs to build more homes and provide key public services.

A regionalised approach to immigration policy could help ensure London's businesses can access the skills they need to grow. Such a policy would not be unprecedented, with countries such as Canada and Australia operating successful regional migration systems"

ENDS

Media contact
Katharine McGee
T: +44 (0)20 7203 1897
M: +44 (0)7827 241528
E: kmcgee@londonchamber.co.uk

NOTES TO EDITOR:

1. The LCCI report Permits, Points and Visas; securing practical immigration for post-Brexit London can be found here. Colin Stanbridge and Sean McKee from LCCI are available for further comment.
2. London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole
3. The cebr study 'Working Capital; the role of migrants working in driving London's Economy is available here.