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Time to open the doors | foreign business in the UK

In today’s blog post we will explore the role of foreign business within the United Kingdom and the contribution of non-EU workers to the U.K. In addition, we shall look at the current government policies and the impact they have on foreign investment and foreign workers entering the United Kingdom.

The tories are the party of business so they say. The chaperones of the SMEs that form the backbone of a resurgent British economy that can take centre stage in the world economy. However, it has been no secret that the current administration has been looking to reduce net migration to the U.K and immigration continues to be a key issue for many voters across the country. The question therefore arises, how does a pro-business, anti-immigration government affect and attract foreign workers and companies moving into the U.K?

According to Home Office minister James Brokenshire, ‘British businesses are overly reliant on foreign workers’.  Seamus Nevin, head of employment and skills policy at the Institute of Directors, sees this differently  saying:

“Other countries welcome top talent. Britain makes it difficult and artificially expensive for students to enter and stay, and now the minister has called for them to be ejected. The idea appears to be that rather than encouraging the best international talent to stay here we train them up and immediately kick them out, so it is our competitors who benefit. This is an abrupt departure from the government’s expressed claim to be ‘business friendly.’”

A surge of 269,000 EU citizens entering the UK in the last year has put pressure on the government to reduce migration numbers. Yet it is clear that neither the U.K Government, nor most governments in Europe, are able to control migration from within the EU as freedom of movement its one of the core tennants. This has lead to ministers looking to reform the EU directive and could potentially be attributed to the rise in recent anti-EU rhetoric.

According to the latest Home Office migration report:

There were 168,544 work-related visas granted in the year ending June 2015, up 6% (+9,313) compared with the previous year…

The number of non-UK nationals in employment in April to June 2015 was 3.2 million, up 257,000 (+9%) compared with the same quarter in 2014. The 257,000 increase was almost entirely accounted for by higher employment of EU nationals (up 250,000 or 14% to 2.0 million). There were increases in each of the EU14 (up 116,000 or +16% to 838,000), EU8 (up 100,000 or +12%, to 959,000) and EU2 (up 40,000 or +29%, to 178,000) groups.

The number of non-EU nationals in employment remained at 1.2 million (with a slight increase of 7,000 or +0.6%).

What can we take from these figures? Two key points. 1) That the rise in employment, which most likely has a postive impact on the economy, was fueled by EU nationals. 2) The number of non-EU nationals working in the U.K is roughly a third of the amount of EU-nationals. So whilst the government is happy to bemoan the amount of migration into the country, it is clear to see from the stastics the huge impact these migrants have economically speaking.

Of course foreign labour will have a direct impact on the number of U.K citizens working and these fears are not without justification but it is important to understand the positive impact that foreign workers can have on the U.K economy.

With EU migration being impossible to limit the government has sought to enact harsher restrictions for non-EU workers looking to come to the U.K. Increased minimum salaries, further PBS systems for Tier 2 applicants and an increase in requirements for both Tier 1 investor and Entrepreneur visas are the latest measures introduced to limit non-EU workers moving to the U.K. Coupled with a general apathy towards the ongoing humantiarian crisis in Europe the U.K government can be seen as rather isolationist in regards to migration.

Whilst the direct impact of these policies remains to be seen, a negative message is being broadcast to the world. Whilst it is obviously important to grow U.K businesses and provide for U.K workers, the U.K cannot exist in an isolationist vacauum. In an increasingly globalised world where foriegn investment is at an all important high the U.K government must be seen to be doing more to court potential investors from around the world. Not many people would disagree with limits to EU migration but it seems as if non-EU nationals, and businesses, are being punished due to it.

Westkin Associates

info@westkin.com

5th Floor, Maddox House,
1 Maddox Street
Mayfair
London
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United Kingdom
0207 118 4546

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