Survey of London business suggests that immigration policy will become a bigger problem as firms fight to return to growth

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The City of London Corporation published a research report, entitled Access to Global Talent: the impact of migration limits on UK financial and professional business services. The report considers the impact of the cap on Tier 1 and Tier 2 economic migration since it was introduced by the coalition government in April 2010.

Ministers responsible for the measure have claimed that low take-up on the smaller number of visas which have been made available under the cap support the view that immigration limits are not hurting business. The limit set in November 2010 for Tier 2 permits was 20,700. At the mid-point in the year fewer than half of the allocation for the period number had been taken up by UK employers.

The evidence presented in the report warns government against the conclusion that it is not creating difficulties for companies which have a continuing need to employer non-EU staff. It points out that the limits have been imposed during a major economic downturn which has affected hiring policies across the board. Despite these pressures firms which are working in international markets still to recruit the ‘global talent’ this will allow them to remain competitive.

With this consideration to the forefront, the report suggests that the proper way to consider the impact of the PBS is not just the level of demand for international workers at this point in a problematic recovery from recession, but the new difficulties it has imposed on businesses which are fighting to return to robust growth.

The report lists the following key findings which indicate that the burden of the new procedures has imposed additional on employers which are likely to grow in time.

Businesses have faced additional direct costs in adapting and adhering to changing immigration policies.

They have having to make greater use of specialist immigration consultations to manage the difficulties of the new system.
There is greater uncertainty about changes which are likely to be down the pipeline.
There is some evidence of businesses postponing or delaying expansion until there is greater certainty about immigration policy in the future.
More liberal international worker recruitment procedures operated in other countries is allowing firms based there to gain advantages over UK companies.
The increased in the direct costs of hiring migrants is proportionately greater for SMEs than for larger companies, since the latter are better equipped to absorb the new impacts.
Business plans that require requirement to be planned many months, or even years, in advance have experienced greater difficulty because of the uncertainty about medium and longer-term plans for migration.

Difficulties also exist for firms requiring short and seasonal relocations of staff (less than six months) , with the new procedures being disproportionate to their needs for rapid decision-making and flexibility.

Minimum income thresholds, whilst easier to demonstrate in London and the South East, are harder to meet in other regions, inhibiting the movement of global talent to these areas.

A roundtable discussion of business representatives and other stakeholders at London Guildhall this morning considered the findings of the report and affirmed its findings as being in line with their experiences of the new difficulties. The point was reiterated that the difficulties which had been found to be present could be expected to become greater time as national economies emerged from the slow-down at different rates and the faster-growing countries cashed in on their advantages by competing more successfully for available global talent.

These finding are reported at a time when the body which advises the government on the economic dimension to its policies, the Migration Advisory Committee, has issued a new call for evidence on the limits which the government intends to set for Tier 2 workers for 2012/13. If the findings reported in this report apply widely across the business sector the call from UK firms will be strongly against any further reduction in numbers and for a less burdensome applications procedure

from MRN

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