• International Workplace
  • 7 March 2018

Businesses need time to prepare for significant changes to migration rules

Businesses need time to adjust to new migration rules, CBI Director-General Carolyn Fairbairn has said, speaking at a CBI event in Cambridge on productivity.

Following official figures confirming fewer EU workers coming to the UK, Fairbairn said a “substantial transition period to a new migration system” will be needed.

She urged the UK government to provide “clarity and certainty over migration policy – now and in the future” to maintain investment in the UK.

She also encouraged the government to guarantee EU citizens’ rights even in the event of a ‘no deal’ scenario.

Fairbairn proposed the UK should have a more controlled yet open arrangement with the EU, reflecting 40 years of economic integration. She added that with record employment rates, limiting access to EU workers would leave companies unable to get the staff they need to grow.

Setting out how the UK economy is already being affected, Fairbairn said:

One issue absolutely vital to productivity is business’ access to people and skills. With record employment rates – and without access to EU workers – firms are unable to get the staff they need to grow.

“For business, this issue is as important as our future trade deal with the EU. Put simply, skills shortages threaten to slow down growth. Training British workers isn’t enough on its own, nor is just hiring from overseas – business needs both.

“The foundations of a great system are in place – in employer-led apprenticeships, T-levels and in the new National Retraining Partnership which every day helps people get back into work. But shortages are deterring investment today."

Explaining how lack of access to skills and labour is already affecting firms, Fairbairn said:

“Let me tell you a story that illustrates the scale of the problem. A local construction firm was about to start work building a new factory. But the client, a chicken producer, had to cancel the project.

“Why? Because they couldn’t get the staff to fillet their chickens. So, in short, they couldn’t justify the new factory. Problems finding the right people don’t just affect the company looking for workers, they have a knock-on effect on the whole supply chain, creating a vicious cycle.

“Uncertainty deters workers and halts investment. This hits a firm’s bottom line, so businesses scale back their investment. The economy and public services suffers, which means less money for schools, roads and yes, for our NHS.”

She said that labour shortages aren’t exclusive to lower-skilled roles, they’re having an impact right across the economy, and that providing a pathway to certainty over migration for firms is a three-step process:

“First, let’s end the game of human poker by telling EU citizens that they’ll be able to stay in the UK – crucially – even in the event of a no-deal scenario.

“Second, no matter the outcome of talks in Brussels, business needs to know that when Freedom of Movement as we know it ends there will be a substantial transition period to the new rules on migration. Once agreed business will need time to adjust to the new rules. Because, without time to prepare, investment will continue to stall.

“Third, we need to say ‘no’ to extending the ‘Tier 2’ visa route to EU citizens. It is costly, complex and unaffordable for smaller businesses. Copying and pasting the Tier 2 system would be a disaster for the UK, damaging competitiveness and stopping businesses getting the people and skills they need to compete globally.

“Instead we need a system which gives firms the confidence to keep investing in every part of the UK. One that ensures that firms of every size and sector get the talent they need for years to come. So now, let’s stop talking about it and instead get it sorted.”