Less than a month ago the UK’s Home Secretary Priti Patel threatened to end the freedom of movement for EU citizens overnight should there be a no-deal Brexit on October 31, 2019. This rhetoric, elevated from years of campaigning by the Home Office under Theresa May to reduce net migration to 100,000 alongside a spectacular immigration-fuelled debate for Britain’s exit from the single market, has led to a hostile environment for European nationals in the UK. Under a Brexit vision for remaining open to the world, and seeking to create a flourishing environment for businesses, the immigration policy is perhaps the biggest constraint for a global facing Britain.
The current environment discounts the contribution made by European and international migrants in the UK working in key sectors across Britain and driving the national growth, including finance, science, technology, education, health, hospitality and retail. Already the NHS is understaffed and overworked, the tech sector is short of engineering talent and the retail and hospitality sectors are losing workers each month. Under a falling EU migration, the candidate pool for companies and businesses have been drastically reduced.
London is currently home to a third of the EU citizens in the UK, with 82 percent of them in middle to high-skilled jobs, indicating how reliant the capital has become on the EU workforce. The more that leave these roles, the more difficult they will be to fill and will ultimately see companies become less appealing to potential investors and will cripple their potential for growth. These concerns have been further fuelled by statistics which have revealed that the UK lost 132,000 EU workers in 2017, while employment from the rest of the world grew by 34,000 – a significant net loss in labour.
According to the Edge Foundation’s report on the Skill Shortages in the UK economy, many organisations have been forced to give up on finding appropriate talent, choosing either to hire at a lower level than intended or to leave the role vacant. As per the report, to address the gaps left by doing this, employers spent £1.45 billion on training to bring workers up to the level required and a further £1.49 billion on temporary staffing.
Foreign talent key to digital tech innovation in UK
The UK’s digital technology industry in particular has been a beneficiary of the global talent, with 18 percent of the industry’s three million workforce being of international origin, while the EU workforce comprised of a third of these foreign workers. The total Gross Value Added per EEA worker as of 2015 was £103,000, almost double that of non-tech sector workers. Today, the UK can be proud of its position as one of the world’s leading centres for fintech, finance, digital innovation, and AI – all made possible due to the contributions of countless national and international talent.
This is where Brexit needs to tread carefully. While the political machinery is working towards disengaging from the European Union, the business community is very much dependent on a cooperative arrangement with the single block. It is vital that the UK maintains strong relations with the EU bloc and its community on a shared platform, attract the top talent and maintain a robust immigration strategy.
Beyond the walls of the EU, the UK also needs to reform its current system of immigration to make it more inclusive and logical – the country needs high skilled labour from around the world in the critical sectors, as previously outlined. For this process of change, the first and foremost change would have to be in removing the net immigration targets. While it is understandable that the UK wants to control the number of foreign migrants entering the country, the net migration targets are not the smartest way of achieving this.
This is where the Australian immigration process offers some pointers for the UK. Like the UK, Australia also seeks a constant flux of international skilled workforce but handles the process under a political framework. Each year, depending on the job market and the national economic performance, the Australian cabinet decides on the number of international migrants the country wishes to take. This way, the country can be sure of the talent it needs to plug the shortfall and remain confident that the influx of migrants would not strain their public services. For 2019, the Australian cabinet decided to take around 160,000 migrants – meaning once the quota of applicants are absorbed into the country, all remaining applicants would have to reapply the year after. This would be a far more realistic measure to control immigration than through unrealistic net migration targets. This will also help reform the public debate about immigration from the threat perception currently at play to a more nuanced and educated argument on their benefits, contribution, and most importantly the necessity.
UK’s tech competitiveness at stake
The idea that Brexit will exacerbate the talent and skills shortage in the UK is nothing new. It is also important to remember that 95 percent of the country’s small firms have never made use of the UK’s current points-based system, which could change considerably once Britain leaves the single block.
Nevertheless, London’s status as a world city is undeniable and still remains one of the best pools for talent in Europe and the rest of the world. Investors will no doubt still be interested in the UK, but if they are to get assurances from the government, the country will remain an attractive prospect post-Brexit. This will be key going forward and only enhance its position in the bloc and to the rest of the world.
Therefore, Brexits presents an opportunity to finally reform the UK’s immigration policy, to make it more robust, inclusive, world facing and competitive. A reformed immigration policy will help create a Britain that can compete with the best in the world in attracting tech and non-tech talent.
Rajan Navani is the VC and MD of the Indian arm of Jetline Group and the CEO and Founder of JetSynthesys. Rajan has worked with NASA’s Goddard Space Flight Centre in Maryland, USA before expanding the family business.