The news of plans to curb EU migration to the UK, reported in the Guardian this September, will be of great concern to many businesses. At Frontline we believe firms need access to a flexible and affordable labour market – especially at times of economic uncertainty – and find the new proposals short-sighted. Here’s why.
What’s on the table? In a nutshell, the aim of the proposed immigration bill is to drive down the number of low-skilled EU migrants entering the UK, in turn giving “preference in the job market to resident workers”. The free movement of labour and the current employment rights of EU workers in the UK will ostensibly end on the date that Brexit is formally completed.
The first part of this equation is reminiscent of Gordon Brown’s ill-fated slogan “British Jobs for British Workers”, and, as explained below, would lead to a reduction in the overall workforce, hitting industries that rely on flexible, cost-effective labour hardest.
The economic benefits of free movement
The free movement of workers across the EU is conducive to a flexible economy. Supporters of the proposed immigration bill argue that a surfeit of immigrant workers in the UK has led to wages being pushed down – a claim about which there is some doubt, if research by The Bank of England is to be believed – but the bottom line is that, if the government implements these proposals, we will inevitably be looking at a less flexible labour market in which the talent pool is reduced.
If the bill is enacted, it will be more expensive for employers to hire and retain staff, and there will be fewer staff available in the first place. UK employment figures will fall overall, and because it will cost more to secure new workers, businesses and individuals will be less able to stimulate growth through spending and investment. Simply put, if growing the economy is the aim, allowing the free movement of workers makes perfect sense from an economic perspective.
Firms need a stable economy in order to flourish and grow, and a necessary precondition for this, to invoke another discredited mantra, is a strong and stable government. There have been reports of disquiet over the immigration proposals amongst sections of the Conservative Party – suggesting the bill is far from a done deal – and, as the leaked Home Office document indicates, the plans are “Subject to negotiations with EU”. The Brexit negotiations have been fractious so far, and there is little reason to believe this will change in the near future. Whatever transpires – and we hope the government rethinks the proposals – clarity and consistency are required in order to encourage business confidence.
If you are concerned about the effect the new immigration proposals might have on your business, call our experts today who will be more than happy to help.