UK employers concerned about migration curbs

London

BRITISH employers have become reliant on European Union (EU) workers and are concerned about restrictions after Britain leaves the bloc next year, according to a government-commissioned study published on Tuesday.

"Employers were fearful about what the future migration system might be," the Migration Advisory Committee said in an interim report. "Many employers in lower-skilled sectors have built a business model in which the ready availability of EEA (European Economic Area) migrant labour played an important, sometimes vital, role."

The UK has seen net migration from other EU countries plunge by more than a half since the 2016 Brexit referendum, with the decline most acute among citizens of the eight eastern countries, including Poland, that joined the bloc in 2004.

Reports suggest EU citizens have been deterred by the Brexit vote, a less-favourable exchange rate and improved job opportunities in their home countries.

"The fall in the value of the pound following the referendum result and the perception that the UK is a less-attractive place to be for a migrant appear to have made it harder to recruit EEA migrants in many areas," the Migration Advisory Committee said.

Lower-skilled sectors have seen large increases in migrants from the EEA who might not be eligible under the existing Tier-2 system, the report said.

Firms were also concerned about skills shortages, and said that while training UK workers might be a long-term solution, they need workers from the EU to fill the gaps.

Theresa May's government commissioned the assessment of the impact of EU workers on the British economy a year after she took office.

Home Secretary Amber Rudd had asked the committee to assess the economic role of EU nationals as plans are developed to control migration from Europe after Britain leaves the bloc in March 2019.

The report summarises evidence the committee received from more than 400 businesses, industry bodies, government departments and other organisations between August and October last year. The final report is due in September.

Immigration was a key reason why Britons backed Brexit - there are about three million EU citizens living in the UK - but Mrs May has been forced to make concessions over residency rights in her negotiations with the EU.

That's been welcomed by businesses, with industries such as farming, food and hospitality already reporting labour shortages.

"Some sectors are struggling now to recruit and retain EEA workers," Alan Manning, chair of the Migration Advisory Committee and a professor at the London School of Economics, told reporters. "Those problems have arisen really without any change, as yet, to migration policy. Migrants have a choice, particularly under free movement, and it can't be assumed that they will come to the UK just because we or an employer wants them to."

After negotiating a transition agreement under which the benefits of EU membership and free movement of workers will continue until the end of 2020, the government has bought itself time to develop a new immigration system.

Yet ministers have disclosed little about what sort of system they want. The Migration Advisory Committee said many employers were ill-prepared for a changing labour market due to "pervasive uncertainty" about the future.

The government said it is committed to controlled and sustainable migration based on evidence from the advisory committee, businesses, universities, regional governments and the health service.

"The British people want control of our borders, and after we leave the EU we will ensure that we can control immigration to Britain from Europe, putting in place a system which works in the best interests of the whole of the UK," the Home Office said in a statement.

The advisory panel said lower immigration would "very likely lead to lower growth in total employment, and lower output growth, However, it would "not necessarily mean lower growth in output per head which is more closely connected to living standards".

And the lower wages paid to workers from new EU member states had not necessarily suppressed pay for Britons, it added. BLOOMBERG