Immigration White Paper: What’s the impact on manufacturing?

Posted on 20 Dec 2018 by Maddy White

Yesterday the government published the long awaited Immigration White Paper, which sets out plans for a new skills-based UK immigration system.

The document sets out the removal of a cap on skilled workers - image courtesy of Depositphotos.
The document sets out the removal of a cap on skilled workers – image courtesy of Depositphotos.

The foundation of the document proposes the removal of a cap on skilled workers coming to Britain from the EU, with a suggested minimum £30,000 salary threshold – this already the case for non-EU workers.

However, lower-skilled and unskilled migrants wouldn’t be able to come to the UK and settle permanently. They would be limited to twelve months in Britain.

Home Secretary Sajid Javid said the new system would be based on the UK’s skills needs rather than where migrants were from and show that the UK is “open for business”.

The Institute of Directors (IoD) commented that the ‘white paper gives with one hand and takes away with the other’. The controversial £30,000 salary cap for skilled workers has been put out for consultation.

The report in a nutshell:

  • Proposes to remove the current cap on the number of skilled workers from the EU and elsewhere
  • Low skilled workers are limited to 12 months in the UK
  • Minimum salary requirement of £30,000 for skilled migrants seeking five-year visas
  • Visitors from the EU will not need visas
  • The new system is planned to be introduced from 2021

The impact?

Skill levels matter to the UK economy, all of them. Limiting overseas workers who earn under £30,000 (and using this as the basis to define ‘skilled’) to 12-months could be damaging and encourage businesses to recruit different people every year.

The need for access to low-skilled EU workers on the production line is essential - Depositphotos.
The need for access to low-skilled EU workers on the production line is essential – Depositphotos.

According to Migration Observatory, an estimated half a million EU citizens are employed in low-skilled jobs in Britain, these include fruit-picking, working in factories, warehouses and cleaning offices.

The extensive report found that 132,000 people are working in cleaning jobs, 120,000 in hospitality roles, 96,000 in warehouses, 91,000 in factories, 74,000 working in food processing and 26,000 on building sites.

This immigration plan could encourage local talent to be utilised, but in the manufacturing industry the skills gap is already evident. However, graduates from the EU and across the globe could now work in Britain when the UK leaves the EU in March without a cap on numbers, though subject to their salary.

For the manufacturing industry where the average salary is £32,500, it sits at the boundary of the proposed  ‘skilled’ threshold.

Lifting the cap on skilled workers is important and liberating, but the need for access to low-skilled EU workers on for example the production line, is equally essential for the industrial sector.

The response

Josh Hardie, CBI deputy director-general, commented: “A new immigration system must command public confidence and support the economy. These proposals would achieve neither.

He said that this system is a “sucker punch” for many firms and that the “government cannot indulge in selective hearing.

people - depositphotos
The document has received mixed responses – image courtesy of depositphotos.

“It tunes in to business evidence on a disastrous Brexit no deal, but tunes out from the economic damage of draconian blocks on access to vital overseas workers.”

Stephen Phipson, CEO of EEF, said: “British manufacturers need a future migration system that allows them to recruit critical mid-skilled roles such as engineering technicians; the UK has a significant skills gap.

“We are pleased that graduates from the EU and the rest of the world will be able now to work in the UK post Brexit and the skills route has been expanded to enable employers to recruit from the EU at technician levels too. These are significant changes.”

He added: “However, many other proposals still cause great concern. Employers will now need to pay thousands of pounds to cover the costs of visas, the immigration skills charge and the health surcharge for new EU workers as well as work through a complex bureaucracy to do so; many companies simply can’t afford this.”

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