British employers totally unprepared for migration change due to Brexit

by Ray Clancy on June 13, 2017

Employers in the UK are totally unprepared for the fall in migration that the new Government has pledged to deliver once the country leaves the European Union, according to new research.

With formal Brexit negotiations set to start within days, a survey from think tank the Resolution Foundations, has identified a huge gap between the kind of immigration system employers expect and what the Government is planning.

(Abdul Razak Latif/Bigstock.com)

The research highlights the fact that it is not just the new Government, but businesses too, that need to step up their preparations for Brexit with 47% of over 500 employers with EU nationals having totally unrealistic expectations of what the post-Brexit immigration regime might be.

Some 17% of firms expect no change to the current system of freedom of movement for EU nationals to the UK, while 30% expect to see that system maintained for those with a job offer.

The Prime Minister in contrast has ruled out either option, stating that demand will control migrant numbers. The Conservative Party has stuck consistently to its pledge to reduce net migration down to tens of thousands.

More immediately the survey found that 46% of employers who employ EU nationals do not expect any change in the number in their workforce over the next 12 months and 24% expect to increase the number of migrant workers they employ, while 26% expect to reduce numbers.

The Foundation says that lower migration, coupled with a higher minimum wage and a tightening jobs market, could put an end to the era of readily available cheap labour that has characterised the UK labour market in recent years.

The gap between what businesses want from a future migration regime, and what the Government is likely to offer, is even starker. Some 65% of firms say that either no change to existing freedom of movement (38%) or a switch to allowing movement for all with a job offer (26%) would be best for their business.

The Foundation says that while Britain’s post-Brexit migration policy should not be solely determined by what businesses want, it is vital that the new Government listens to business and gives firms the clarity they need to start preparing for a new immigration regime and that ensuring a smooth transition towards a lower migration post-Brexit labour market should be a key objective as failure to do so could deal a major blow to productivity and with it prospects for future pay and jobs growth.

‘Many British firms are totally unprepared, particularly when it comes to migration. Ministers have compounded this uncertainty by choosing not to answer questions over what a post-Brexit immigration regime might be,’ said Torsten Bell, director of the Resolution Foundation.

‘Whatever people’s views on Brexit, the journey not just the destination matter hugely to growth, jobs and living standards. Now is the time for both firms and government to focus on how we navigate that journey and the changes to our labour market it brings,’ he added.

Reconciling the differences between what Government has pledged and what business wants is vital, according to Stephen Clarke, policy analyst at the Resolution Foundation. ‘This is particularly important for firms in migrant-reliant sectors such as agriculture, food manufacturing, hospitality and construction. In these sectors business models may need to be rethought, new temporary worker systems navigated or failing that operations closed or moved abroad,’ he explained.

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