Mayor reveals damage that Government immigration plans risk inflicting

30 July 2019

• Crucial sectors such as construction, social care and hospitality could struggle to fill key posts

• Sadiq calls on new PM to adopt alternative immigration plan and reduce skilled salary threshold to £21,000

• ‘Fast-track’ visa proposal to allow the Capital to bring in vital skilled workers

The Mayor of London, Sadiq Khan, has revealed today new evidence of the damage that the Government’s immigration plans could do to London’s economy when the UK leaves the European Union.

He urged the new Prime Minister, Boris Johnson, to ‘fully recognise the positive impact immigration and Freedom of Movement has had in London and the UK’ and come forward with anew plan to ensure the capital and UK can continue to attract European and international workers following Brexit.

Sadiq’s key demands include:
• A lower salary threshold – to be set at £21,000 - for the Tier 2 ‘skilled worker’ visa rather than ministers’ proposed threshold of £30,000.
• Devolved powers for London to fast track visas for those with the skills the capital most needs.

Speaking to the London Chamber of Commerce and Industry last night, Sadiq argued that immigration has enhanced London and the UK’s economy and communities, making the capital an unrivalled, vibrant global city

However, new City Hall research published today shows that crucial sectors such as construction, social care and hospitality could struggle to fill key posts under the proposals outlined in the Government’s Immigration White Paper.

The study finds that employers could struggle to fill vacancies in occupations that account for around half of all jobs in the capital. Nurseries, cleaning firms and homebuilders and employers with roles regarded as ‘lower-skilled’ risk being unable to make long-term hires from abroad under the Government’s plans.

In particular, the Mayor is concerned that the proposed £30,000 minimum salary threshold for Tier 2 skilled worker visas would prevent the recruitment of long-term migrant workers in roles where almost 150,000 European Londoners are currently employed across the capital -with a quarter of the ineligible jobs found in construction and hospitality occupations alone.

The Mayor believes the Government should set the Tier 2 salary threshold at around £21,000 per year, the equivalent of the London Living Wage. City Hall estimates this would more than halve the number of jobs affected by the current proposals.

Sadiq also wants to see a more devolved approach to immigration with London and the regions given more flexibility and control to attract the talent they need.

Proposals include giving London the ability to create its own dynamic Shortage Occupation List to speed up recruitment to key vacancies, and introducing a freelance visa, recognising the increasingly important role that freelance workers play in the new economy, particularly in London’s vital creative and technology industries.

The Mayor has also written to the new Home Secretary, Priti Patel, urging the Government to take a fresh look at their ‘flawed immigration proposals’.

The Mayor of London, Sadiq Khan, said: “London is known across the world for our openness, our diversity and our innovation and I’m proud to be the most pro-Business Mayor that this City has ever had. Making London a fairer city and ensuring that all Londoners get the opportunities that our city gave to me when I was growing up, is one of my core priorities as Mayor.

“If the Government’s proposed immigration changes go ahead, then I’m fearful for the impact they’ll have on the fabric of our city. The impact on the construction sector would make the housing crisis worse. And the impact on public services, including our schools and the NHS, could have devastating consequences for years to come.

“The new Prime Minister should instead fully recognise the positive impact immigration and Freedom of Movement has had in London and the UK and immediately take steps to reform the immigration system in a way that enables us to unlock the potential of Londoners. If he is unable to do this, then he should let Londoners take back control and give City Hall the devolved powers that he previously called for as Mayor.”

Peter Bishop, interim Chief Executive of London Chamber of Commerce and Industry, said: “Migrants form the fabric of London’s businesses and communities and the capital is far more reliant upon foreign labour than any other region in the UK. This is why, for many years, LCCI has pushed for a devolved immigration system to a London level.

“A proposal we have strongly pushed for is a dedicated Shortage Occupation List for the capital. It is great to see the Mayor of London lending his support to this, and also to see him continuing to support the merits of immigration, including calling for a lowering of the £30,000 salary threshold proposed in the government’s immigration white paper.

“Our polling out just last week showed that 57 per cent of businesses say that level would worsen London’s skills shortages, with 68 per cent saying particularly for low-skilled labour supply. Whilst half of London businesses say it would also negatively impact the capital’s housing and infrastructure projects.”

Julia Onslow-Cole, Partner for global government strategies at Fragomen, Chamber of Commerce Board member and a member of the Mayor’s Brexit Expert Advisory Panel, said: “Multiple business sectors are concerned about the proposed £30,000 salary threshold. And that’s not just within the UK itself. For example, I was in Silicon Valley recently, talking to tech companies – who are worried about the impact that threshold would have on their U.K base, staff and suppliers.

“UK business and business organisations were rapid in voicing widespread concern about the £30,000 figure to government. But whilst it’s welcome that the Home Secretary has asked for the figure to be revisited, the process of reviewing the threshold isn’t a swift one, inevitably leading to a continuation of concern and even delayed investment. The figure needs to be lowered soon.”

Workers born in Europe have made an increasingly significant contribution to London’s labour market since 2004 across a range of higher and lower-skilled occupations. 14 per cent of jobs in the capital are now held by workers born in the rest of the European Economic Area, a far higher proportion than in the rest of the UK.

Notes to editors

*Latest Office for National Statistics Annual Population Survey figures.

City Hall research on immigration is available athttps://www.london.gov.uk/business-and-economy-publications/potential-im...

To ensure London and the UK can continue to attract global talent, the Mayor has today published his own immigration proposals. He is calling on Government to:
• Lower the minimum salary threshold for skilled workers to £21,000 or the equivalent of the London Living Wage.This would cut by more than half the number of European-held jobs that would otherwise not qualify for the Tier 2 visa route in future. The largest decline would be for ‘Construction and building trades’ – down from 24,900 to 11,800 jobs.

• Creating a dynamic Shortage Occupation List for London, to fast track people needed for specific occupations where the need for overseas talent is greatest.This would give employers a mechanism to report acute skills shortages more swiftly than the national shortage occupation list. The shortage occupation list is an official list of occupations that are in high demand in the UK and for which there are not enough resident workers to fill vacancies. A devolved and regularly updated list for London would help employers to target roles where they are most needed.
• Creating fit-for-purpose visa routes for lower skilled jobs.City Hall estimates that a third of jobs in London are in occupations that would not meet the proposed qualifications threshold for a Tier 2 visa. Within those, an estimated 301,500 jobs are currently held by people born in Europe. The Mayor believes employers need to be able to recruit long-term workers for roles like these and argues that “cooling-off” periods between visas risk people becoming undocumented and vulnerable to exploitation.
• Reviewing the Immigration Skills Charge.Either abolishing or devolving control over how London’s share of the £90m raised each year is spent on skills shortages in the capital.
• Giving London & Partners a role in the start up and innovator visa scheme. The mayor’s official promotion agency should have a key role in helping the capital’s incubators and accelerators to get involved in endorsing visas from London entrepreneurs.
• Introducing a Freelance Visa.As recommended by the Creative Industries Federation and London First, the Home Office should set out proposals that would allow freelancers to provide services in the UK on a long-term basis.

NOTES ON THE ANALYSIS:

• Unless otherwise stated ‘European’ has been used here to refer to workers born in the rest of the European Economic Area, excluding the UK.

• The research carried out draws heavily on data provided by the Office for National Statistics (ONS), particularly data from theAnnual Population Survey (APS) andAnnual Survey of Hours and Earnings (ASHE).

• As with any analysis of this kind, there are limitations on data availability and the need to impute data to fill gaps. The full reports set out in detail the methodology and sources behind our analysis.

The research is also focused on two of the key measures from the Government’s Immigration White Paper which have received most attention from employers and other stakeholders: namely the RQF3+ skills and £30,000 minimum salary thresholds for skilled work visas. It does not offer definitive judgments about the impact of every aspect of the Government’s proposals; and other policies could alleviate the impacts for some identified occupations

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