London has a greater reliance on foreign workers than the rest of the UK. The capital has long been a hub for immigration and EU workers make a vital contribution to the London and wider UK economy.
LCCI-commissioned research found that the capital is three times more reliant on foreign workers than the rest of the UK. In 2016, EU migrants contributed an estimated £7 billion in direct taxes, and £26 billion in economic output. Clearly London would be particularly susceptible to any restrictive changes in a new government immigration policy.
Against this background London Chamber of Commerce and Industry (LCCI) responded to the Migration Advisory Committee (MAC) call for evidence on the economic and social impact of the UKs exit from the EU and subsequently provided evidence to them in October.
The response was informed by the Chamber’s Permits, Points and Visas report (including a commissioned economic analysis by the Centre for Economics and Business Research), roundtable discussions with members, and ongoing engagement with external stakeholders since the Brexit poll.
The Chamber found that migrant labour is helping to fulfil staff shortages in vital sectors that are critical to the continued growth and development of the capital’s economy. Given the chronic shortage of housing in London, the statistics for the construction sector stand out – with 30 per cent of sector employees in London being EU nationals. Clearly, securing a practical post-Brexit immigration system is vital to provide sufficient labour to build the volume of homes London needs.
In collaboration with London Councils LCCI has carried out research of 1,000 businesses across the capital. The survey findings, published in July 2017, found that 40 per cent of firms employ EU workers and revealed that the main reasons for businesses employing non-UK workers was access to skills, education and experience.
The Chamber’s central recommendation to the MAC is that London should have a dedicated Shortage Occupation List (as Scotland already has) which would help streamline the immigration process for specific occupations, based on data of gaps identified. To underpin this the Mayor of London could conduct an annual skills audit. This would help inform any London Shortage Occupation List and provide a solid evidence base upon which to construct proposals for a future system of Capital Work Permits. Businesses would then be able to access the labour they required that genuinely could not be sourced domestically.
LCCI-commissioned research found that the capital is three times more reliant on foreign workers than the rest of the UK.
Whilst more should be done to fill these skills gaps domestically, EU migrant labour will continue to play a critical role in supporting London business as they seek to retain and recruit staff.
The government is scheduled to publish an Immigration White Paper before the end of 2017, with an Immigration Bill expected in the New Year. Brandon Lewis MP, Home Office minister, said that details of new government immigration policy would not be made public until next autumn, when the MAC is due to issue its final report on EU migrants’ impact on the British labour market.
However, there is understandable scepticism as to how much influence the MAC will have in shaping government policy on immigration given this timetable, which has the MAC reporting at the same time as the government is due to publish its detailed plans. This is one reason why LCCI is urging the MAC to provide an interim report early in 2018.
Failure to secure a practical post-Brexit immigration system for London will have a detrimental impact on the capital’s ability to continue to be a leading global city that it is today. With London the engine of the UK economy, undermining London’s firms’ ability to access EU migrant labour would also adversely impact the wider UK economy.
Ultimately, LCCI believes that there is a strong evidence base for a post-Brexit immigration system that supports the capital’s unique characteristics.
London Chamber of Commerce and Industry (LCCI) is the capital's largest independent networking and business support organisation. Representing the interests of thousands of companies, we connect thousands of business people every year and offer our members a wide range of practical and professional services.