How can the UK create a pro-business immigration policy?

There can be little doubt that immigration has been central to political debate in the UK for the last decade, with pressure on the issue mounting since the referendum on the European Union. It is probably this pressure that led Theresa May to declare this week that Britain will leave the Single Market—meaning that it will no longer have to accept the free movement of people which comes with membership of it. But now that we have to create a new immigration policy, how can the government best ensure that public concerns are addressed without damaging business? In GK Strategy and onefourzero’s new report, “Farewell to Free Movement? Immigration and Workforce After Brexit,” we have examined these questions closely.

The government has sought to reassure the business community that they will be consulted on the Brexit negotiations, and any constructive opposition to prohibitive immigration measures will have to come from here. Labour is still largely blamed for the mismanagement of migration from EU accession states in 2004 and the party has been less than clear in its stance, with leader Jeremy Corbyn most recently declaring that he is “not wedded” to free movement. With the Liberal Democrats pro-EU but too weak to have a significant influence on the direction of negotiations, and the Scottish National Party mistrusted by English voters, it will be down to the business community to argue the case for an immigration policy that reflects and responds to the needs of the economy.

Theresa May will need to strike a balance between public demands to restrict migration from EU member states and the need for businesses to secure the labour they require to succeed. During the referendum, the Leave campaign made much of the idea of an “Australian-style points-based system,”—a phrase perennially popular in British political discourse but one that has never materialised into policy. The advantages of a points-based system are clear: the government could claim it is being “tough” on immigration through a series of stringent criteria that are transparent and simple for the public to understand, and fits with the idea of “taking back control.” It would also make it possible for the government to meet that longstanding but elusive target of bringing net migration down to “the tens of thousands.”

However, May has already rejected a system based purely on points. A visa system that allows companies to determine the workers and the skills they need appears to be the most practical way forward, and can still be moderated by an overarching set of criteria for entry set centrally by the government. The current system for migration from non-EU countries is essentially this. While a visa system may be an extra burden for employers to manage, it is likely preferable to the government simply making a pool of labour available that does not necessarily give them workers with the required skills and experience, as a points-based system would risk doing.

There is concern among British employers that the government is so focused on reducing overall net migration and assuaging public concern that its rhetoric is producing a crude and simplistic distinction between the value of skilled and unskilled migrants, rendering the former only conditionally welcome and the latter simply undesirable. The government has to address these fears with its new system, and ensure that sectors such as health and social care which rely on EU migration are sufficiently supported.

Government rhetoric also risks undermining the attractiveness of the UK as a destination for European workers. Our research suggests that there has been a significant decline in the number of EU citizens who intend to move to the UK to work, in both skilled and unskilled sectors. If demand to move to the UK after Brexit is not to fall further, a solution must be reached which attracts the best and brightest to the UK.

The government has to find a way forward in its Brexit negotiations that does not fall foul of public opinion, meets the needs of the UK’s employers and ensures that Europeans still want to come here to work. It will undoubtedly be the biggest public policy challenge this country has faced in a generation.

Luke Kennedy is founder of GK Strategy, an independent consultancy, who support investors and organisations to analyse, understand and manage political risk. GK Strategy’s report "Farewell to Free Movement? Immigration and workforce after Brexit" can be downloaded here