Immigration rules are damaging economic growth

Current immigration rules are gravely hampering the growth of UK PLC. Whilst the emotive sloganeering of UKIP may be popular at the ballot boxes, the economic reality is that competing EU member states are stealing a march on the UK through more flexible rules in relation to highly skilled workers.

To be clear, I’m not disputing the challenges to the broader UK labour market. Unemployment has grown from five per cent in April 2008 to 7.8 per cent in June 2013. However, the reality is that the demand for more specialist technical skills, particularly within the Energy and IT sectors has grown rather than diminished over this period. Despite the doom and gloom elsewhere, The Subsea Oil and Gas sector has generated a staggering 16,000 new jobs in the UK since 2010. This upturn is mirrored within IT, with The Office for National Statistic’s March 2013 survey remarking upon the biggest growth in IT jobs since the dot-com bubble of the late-1990’s.

Evidently, a better, more pragmatic separation needs to be made between lower and higher-skilled workers wishing to enter the country. The structural shift towards a service-based UK economy has left significant skills shortages that have been left unaddressed for decades. Subsequently, as much as we would love for the UK to produce it’s own talent domestically; this isn’t about to happen any time soon.

As the founder of IT and Engineering recruitment agency Vivid Resourcing I’ve been able to observe first-hand the negative impact of the 2010 Immigration Reforms. Whilst Nicholas Soames MP, Tory chair of the Cross Party Group on Balanced Migration, recently claimed that “not a single skilled worker has been refused a visa” post-2010, our experience is that the current system is fraught with problems.

We speak each week with new clients who have been looking for highly skilled staff for upwards of three months. This ranges from small Digital Agencies seeking Web Developers through to giant Oil Operators in Aberdeen requiring Offshore Drilling Engineers. In many of these cases the clients bemoan their inability to consider candidates from outside the EEA, and the negative impact this has on their business: delayed projects, an inability to tender for new business or losing work to foreign competitors.

So what are the barriers to hiring non-EU workers in these cases? In theory the recruitment process should be relatively straightforward. Over twenty thousand migrants are able to enter the UK each financial year as skilled ‘Tier 2’ workers. However, this has not occurred despite obvious demand. For many businesses the cost of registering to sponsor such workers (8-25k depending upon company size) is hugely prohibitive. Employers are also bound to follow the Resident Labour Market Test whereby they must advertise roles in Jobcentre Plus for four weeks before applying for a Tier 2 permit. Total delays usually amount to three to five months, a period very few companies and some applicants are unwilling to consider.

To resolve these issues we must emulate the immigration systems employed by The Netherlands, Germany and Belgium. Whilst these nations still uphold strict rules, they take a much more sensible view: if there’s a skills shortage that is hampering domestic companies, fill it, and fill it quickly! A minimum income threshold is set. This prevents a deflationary impact on domestic wages whilst also ensuring useful contributions towards taxation revenues. There is also a much more streamlined and low-cost application process, typically amounting to three to six weeks depending on civil service workloads. If their recruitment processes are in order (partnering with a good agency is a start!) it’s rare that companies in these nations experience the same problems as their UK counterparts.

Given the challenges faced by our domestic economy, it’s imperative that we change our immigration rules to allow our domestic entrepreneurs to thrive. The UK is competing against other developed economies, handicapped by red tape and regulation in the labour market. The current government- normally the self-proclaimed scourge of both these problems- must act quickly and decisively to correct this.

Charlie Walker is MD and founder of international recruitment firm Vivid Resourcing.

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