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Today the Government has unveiled details of its plans for the UK’s post-Brexit immigration system. As our recent With or Without EU showed, these changes will affect cities more than other parts of the country.
And while full details of the policy are not yet available, the Government’s media announcements today suggest it is primarily focused on cutting low-skilled migration from Europe and beyond.
Firstly, migrants from the rest of the EU will require visas to work in the UK once the Brexit transition period ends in 2021, and will need to meet minimum salary thresholds before taking a job – just like those from the rest of the world currently do. And while there will be ‘temporary’ exemptions for areas of the economy dependent on low-skilled migrants, the new system seems to encourage businesses to train up British workers or invest in technology
These proposals will have major implications for UK cities, and also raise a number of pressing questions for the Government to address:
Low-skilled industries are the most reliant on EU workers. For example, our research shows that one in every ten workers in the hospitality sector in cities – a predominantly low-skilled industry – came from the EU.
The Government hopes and expects that these jobs could be filled by British workers, but the reality is more complicated. Our research shows that demand for low-skilled workers is highest in cities in the Greater South East – places which also have high costs of living. But people with few formal qualifications are less likely to move for work, with living costs being one of the main barriers. As such, it’s unlikely that low-skilled workers in other parts of the country will move to these cities to take up jobs vacated by EU migrants, unless more is done to improve the attractiveness of these places to this group of workers, such as reducing the housing costs, improving transport networks and increasing wages.
As much as we want the Government to address these issues, it is unlikely to do so by 2021. The upshot is that the Government’s proposals is that cities in the Greater South East like Cambridge, London and Oxford will face significant labour shortages for low-skilled roles, especially in the short-term.
The Government has recognised the need to make some temporary exemptions “for areas of the economy dependent on low-skilled migrants” – hence its recent announcement on temporary visas for fruit-pickers. But as yet, it hasn’t indicated that it will offer similar arrangements for sectors that play a big role in cities and which rely on low-skilled migrants, such as hospitality.
Moreover, this kind of sectoral focus doesn’t reflect how the reliance on migrant labour varies across places. For example, in Cardiff, the hospitality sector is the most reliant on the EU workforce (which accounts for one every three jobs in the sector), while in Northampton it was logistics (one every six).
This illustrates the inadequacy of a sectoral-focused approach to addressing the EU labour shortages that cities could face post-Brexit.
The Home Secretary Sajid Javid has emphasised that the new immigration system will be “very focused on high-skilled people” and attracting “the best talent from across the world”.
But for that to happen, the Government needs to remove the current cap on high-skilled migrants. At the moment, the number of visas available through Tier 2 scheme – the main route through which non-EEA high-skilled workers come to the UK – is capped at 20,700 a year. But in reality, the demand for high-skilled workers in places like Cambridge and London is much higher and it is met by employing EU high-skilled workers that are currently outside the cap.
Javid has indicated the Government is open to removing the cap. If it fails to do so, cities could face shortages in high-skilled workers, as well as low-skilled workers.
As such, big questions and concerns remain about the Government’s plans for post-Brexit immigration and how it will impact different cities. In particular, the Government needs to recognise the importance of low-skilled workers to city economies, and remove caps on high-skilled migrants. Both factors will be crucial for the prosperity of cities in the coming years and should be key considerations in the Government’s upcoming immigration white paper.