U.K. Unveils Post-Brexit Immigration Plan, Angering Business

(Bloomberg) -- The U.K. published its long-awaited immigration plan for life outside the European Union, to end freedom of movement from the bloc and prioritize skilled workers regardless of nationality. Home Secretary Sajid Javid said the aim was to bring net migration down to “sustainable levels.”

Reducing immigration has been a major issue for British voters and was a key motivation for many who chose to leave the EU in the 2016 referendum. The freedom of citizens to move between members states is a founding principle of the bloc and isn’t negotiable, its leaders say.

But the tougher rules of migrants -- especially the government’s proposed salary threshold of 30,000 pounds ($38,000) for skilled workers -- would be a “sucker punch” for many companies that will struggle to recruit or retain staff, the Confederation of British Industry lobby group said in a statement.

The Cabinet was itself divided, and it was only after last-ditch negotiations between Prime Minister Theresa May, Chancellor Philip Hammond and Business Secretary Greg Clark Tuesday that publication of the white paper went ahead.

The compromise -- to hold a 12-month public consultation on the threshold -- sought to take account of May’s desire to reduce immigration to below 100,000 in line with her Conservative Party’s 2017 manifesto, and other ministers’ concerns that the economy will suffer if a migrant talent pool dries up.

Work and Pensions Secretary Amber Rudd told ITV in an interview that it’s a "real concern" if businesses can’t hire people they need because of the salary threshold. "It will need to come down in order to address the real needs that businesses have for lower salaried people, who are often skilled people, but they come in at low salaries," she said.

Speaking in the House of Commons, May said emphatically that the government is sticking to the target of reducing net migration to the tens of thousands. Yet Javid himself didn’t repeat the line in his statement moments later, saying only that the plan was to reduce immigration to “sustainable levels.”

The government’s white paper makes clear there is no cap on the number of skilled migrants who come to the U.K.

Skills Focus

“Britain is going to stay open for business,” Javid said in Parliament. “We will continue to welcome talented people from all corners of the globe.”

He also said the plans wouldn’t harm the economy, arguing many countries -- including the U.S. and Canada -- do well without freedom of movement.

EU citizens will acquire settled status if they have lived in the U.K. for five years. Those arriving during the so-called implementation period laid out in the Brexit deal between the U.K. and EU -- which is not yet ratified -- will have their route to settled status streamlined, according to the white paper.

In the event of no deal with the bloc, May told Parliament her priority would be the EU citizens currently residing in the U.K. and she expects a reciprocal arrangement from the bloc.

To ease concerns from business, the white paper also includes new routes for immigration, including extra time for students to seek work experience after completing their degree course. The number of entrants under the skilled migrant route will not be capped. There will also be exemptions for jobs where skilled workers are in short supply alongside “highly-valued” immigrants, such as scientists and engineers.

‘National Interests’

“The future system is about making immigration work in the best interests of the U.K.,” Javid told lawmakers. “Everyone in the future -- with the exception of U.K. and Irish nationals -- will need to get U.K. permission before they can come here,” he said, adding that it will be a single system for all nationalities.

On Thursday, Javid will introduce a new bill on immigration to Parliament intended to prepare the U.K. for leaving the EU. The white paper published Wednesday contains proposals for the future relationship with the bloc.

Mayor of London Sadiq Khan, an influential figure in the opposition Labour Party, said the plans could do “profound damage” to growth.

“It makes absolutely no sense for the government to come forward with a one-size-fits-all policy for the whole country,” he said, according to a statement. “That simply won’t work for London and flies in the face of what London businesses and we at City Hall have repeatedly told ministers we need.”

--With assistance from Alex Morales.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Mark Williams

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