Author: Alys Key
British businesses could face soaring costs when hiring employees from Europe unless the UK’s immigration system is reformed, a new report has found.
Firms bringing skilled European workers into the UK could face an increase in costs of up to 300 per cent unless changes are made in preparation for Brexit, TheCityUK and EY warned.
The increase would come about if existing immigration rules are applied unchanged to European citizens once the UK has left the European Union.
This combined with a planned rise in Tier 2 visa fees will create an expensive headache for employers if no other solution is struck.
Miles Celic, chief executive of TheCityUK said that reforming immigration rules was “essential”.
“Simply applying the current immigration system for non-European citizens to European citizens after Brexit will not work,” he said. “Doing so is likely to worsen existing skills shortages and make it much harder to attract the talent British firms need to compete on the world stage following Brexit. ”
Any increase in costs would hit London businesses especially hard, according to data collected by the organisations. While European citizens make up 7.5 per cent of banking and finance employees across the UK as a whole, this rises to 16.9 per cent in London.
The report makes nine recommendations, including several reforms to the visa system.
These include a new post-study work visa which would allow European graduates of STEM subjects to work in the UK for up to two years, and a specialist branch of Tier 2 visas to cover overseas experts.
“The current Tier 2 visa system is out of date – we need a much more flexible and dynamic system, which responds to today’s very real skills shortages, particularly around technology, which will worsen if not addressed,” said Margaret Burton, a parter of global immigration at EY.
The government has made some moves to reassure industry that hiring overseas talent will still be possible after Brexit, but has stopped short of sweeping reforms.
The home office pledges last year to double the number of visas available for tech experts from outside the EU to come and work in the UK to 2,000.
But it is still unclear how EU citizens will be treated after Brexit, since a plan to register them was slammed as illegal.
New home secretary Sajid Javid’s attempts to smooth things over in a meeting with EU Brexit co-ordinator Guy Verhofstadt last week were inconclusive, with Verhofstadt saying concerns over the plan have not been “sufficiently addressed”.
Primer Minister Theresa May has insisted that EU citizens who arrive after March 2019 will not be treated the same as their counterparts who arrived earlier.