Monday 15 August 2016

New immigration charges may lead to skills gap says leading business group

London Chamber of Commerce and Industry (LCCI) today warned that new immigration charges for businesses may lead to a skills gap, as many firms struggle to meet the cost.

A new survey, conducted in partnership with ComRes, shows that less than a quarter (21%) of London business decision makers say that their business would be able to afford the new charge which comes into effect next April as part of the Immigration Act 2016.

The charge means employers who sponsor skilled workers from outside of the European Economic Area will have to pay £1,000 per employee per year, with a reduced rate of £364 for small or charitable organisations.

It is designed to cut down on the number of businesses taking on migrant workers and incentivise training British staff to fill those jobs.

However, the LCCI survey found that only 36% of London business decision makers say they will be encouraged to train or hire British workers instead of hiring non-EEA nationals.

Meanwhile, a third (33%) say they will need to cut costs elsewhere in order to pay the charge and employ workers on Tier 2 visas.

And 45% of business decision makers say that the charge will lead to skills gaps in the business if they have not been able to hire British workers or cut costs elsewhere.

The first part of the Immigration Act 2016 was implemented on 12 July 2016, increasing the penalties on employers who employ illegal migrants, allowing earnings to be recovered from illegal workers and making it a criminal offence for illegal migrants to undertake employment
Chief Executive of London Chamber of Commerce and Industry, Colin Stanbridge said:
"While we obviously recognise the aim behind this act, we are concerned that the charge will hit many of those for whom it was not actually intended.
"Our findings suggest that businesses do not always have a choice when hiring and are looking for those who have the right skills regardless of whether or not they are from the EEA or not.
"These charges will have a significant effect on businesses and may force some to cease trading either because they can no longer afford to or they can no longer find the skills."

ENDS

Media contact
Katharine McGee
T: +44 (0)20 7203 1897
M: +44 (0)7827 241528
E: kmcgee@londonchamber.co.uk

NOTES TO EDITOR:
1. London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
2. Colin Stanbridge, Chief Executive, is available for further comment and interview.
3. ComRes surveyed 508 London business decision makers online between 16th May and 6th June 2016. Data were weighted to be representative of all London businesses by company size and broad industry sector.
4. ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comres.co.uk