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The Wolfestone View: Why immigration is fundamental to the UK economy

We explore the UK government’s new immigration rules and consider their potential impact on post-Brexit Britain.

In this week’s blog, we’ll explore the UK government’s new immigration rules, consider their potential impact on post-Brexit Britain and hear from our co-founder and CEO, Anna Bastek, on why immigration is fundamental to the UK economy.

What’s more, don’t miss our Business After Brexit blog series launching next week, in which we’ll be offering our top tips and advice on everything businesses need to be thinking about over the coming year.

Last week, the UK Government introduced plans for a new, points-based immigration system for migrants who wish to enter the UK.

Home Secretary Priti Patel told BBC Breakfast that the plans, due to be introduced on January 1st 2021, are set to "reduce the levels of people coming to the UK with low skills" and to instead "encourage people with the right talent.”

She added that there’ll no longer be routes for “cheap, low-skilled labour.” Migrants will soon have to meet specific “skills criteria,” which include speaking English fluently, already having a job offer from a UK-based company and earning above a certain salary threshold.

But who’ll be affected? And how exactly will the system work?

UK parliament landscape and Big Ben

Who’ll be affected

Those workers from the EU who are already in the UK should apply to the EU Settlement Scheme. If approved, they’ll be able to continue living in the UK after 30 June 2021.

This also means they’ll be able to access healthcare, education and benefits should they become unemployed, just like UK citizens.

But under the new plans, EU and non-EU citizens coming to the UK would be “treated equally” once UK-EU free movement ends on 31 December.

Therefore, the new points-based system would apply to both EU and non-EU citizens looking to come to the UK to work.

How will the UK's new immigration system work?

Overseas citizens will need to be able to reach 70 points to be able to work in the UK.

The following each represent 20 points:

  • Offer of job by approved sponsor
  • Having a job at appropriate skill level
  • Having a relevant PhD in a STEM subject
  • Salary of £25,600 or above

The following each represent 10 points:

  • Having a PhD in any subject relevant to the job
  • Speaking English at a ‘required’ level
  • Salary of £23,040 – £25,599

There will also be a ‘shortage occupation’ list that’s set to cover nursing amongst other professions. This is outlined in more detail on the UK government website.

What does ‘Low-skilled’ really mean?

Much of the criticism of these new immigration plans are based on the idea of labelling many necessary and important professions as ‘low-skilled’, such as care work, hospitality work and certain types of farm work.

Although the definition of skilled workers would be expanded under the plan to encompass those educated to A-level/Scottish Highers-equivalent standard (not just graduate level, as is currently the case), there remains a lot of concern about the fairness of the new system – as well as the impact on the UK.

How the UK as a whole will be affected?

So, will the UK be set to lose out from these new immigration rules?

According to our co-founder and CEO Anna Bastek, the plans could have a seriously negative impact on the UK economy.

She says, “A lot of migrant workers, who are essential to the economy, will not meet the required 70 points and employers might struggle to recruit for certain jobs. Some sectors, such as care, hospitality, tourism and food and drink, will suffer the most.”

Waiter with beverages

“Wolfestone Group have just opened a European office in Bucharest to make sure we are able to employ multilingual graduates who we cannot find easily in the UK. It also protects the business from Brexit.

“There is a shortage of language skills in this country, and translation is the area we operate in. I believe a lot of companies might be doing the same which means a lot of jobs might move out of the UK.

“If the system had been in place when I arrived in the UK 16 years ago, I probably wouldn’t have met the criteria and been able to get a visa. This means Wolfestone and VoiceBox, wouldn’t exist and 60 jobs in the UK wouldn’t have been created, not to mention hundreds of freelance jobs and 2 successful acquisitions of RLI and City Lingual, which are growing fast and creating new jobs all the time.”

According to an official government study, European migrants make positive net contribution to UK public finances, whereas an average UK adult’s lifetime net contribution is zero. This means there is a concrete fiscal benefit of having EEU migrants in the UK.”

Immigration in the UK: The Tech Sector

So how could the new rules affect the tech sector?

According to a 2019 report from The Entrepreneurs Network think tank, 49% of British fastest-growing startups have immigrant co-founders, 42% of which are EU-born.

Currently, any EU citizen with a startup idea can move to the UK to launch their business.

However, under the new proposed plans, European entrepreneurs will need to apply for a specific Innovator visa, which requires them to prove they have at least £50,000 in investment, as well as an endorsement from a government-approved body. As Anna Bastek mentioned, this would exclude talented, ambitious EU-nationals who are ready and willing to start businesses from scratch.

What’s more, Matt Warren, chief executive of tech company Veeqo in Swansea, said the plans would make hiring "even harder".

"We have a lot of experience with the current points-based immigration system which is used for non-EU Citizens.

"It is a painfully slow, lengthy, complicated and expensive process, which takes on average six-plus months from start to finish.

The Care Sector

Elsewhere in the care sector, Mario Kreft, chairman of Care Forum Wales, has warned that the new rules would make a "major recruitment crisis" worse and lead to a "severe" shortage of carers.

He also said pay levels would have to rise significantly to attract "home-grown" staff.

Lady pushing an older lady in a wheelchair through a meadow

According to a Welsh Government report, about 6.4% of the workforce in the care sector are non-UK EU nationals.

Conclusion

The evidence is clear: immigration makes the UK more productive, and benefits the Treasury. What’s more, European migrants make positive net contribution to UK public purse.

Wolfestone Group urges the UK government the review their proposed plans for a points-based immigration system and ensure that UK-based businesses won’t be losing out on talented workers across every sector.

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