The utter exasperation among the business community in recent weeks over the Conservatives’ planned clampdown on immigration from the European Union has been eye-catching.
And when even Scottish Secretary Alister Jack concedes there is a problem, you might hope that Prime Minister Boris Johnson, Home Secretary Priti Patel et al might wake up to the issues.
The warnings over what the new Tory immigration policy would mean for business have emanated from a vast array of sources, including Scottish Engineering chief executive Paul Sheerin, the Federation of Small Businesses, and craft brewer BrewDog.
This is no surprise. Some sectors, such as tourism and leisure, and healthcare, look particularly exposed to the Conservative immigration folly.
However, it is crucial to realise that private and public sector employers in Scotland and across the UK, whether in engineering, information technology, academia, or food and drink production to name just a few, rely greatly and for good reason on the skills and endeavours of EU citizens.
In line with their rumblings ahead of the December General Election, the Tories last month laid out their plans for a points-based immigration system which will be applied to people from EU countries when the UK’s Brexit transition period runs out at the year-end.
It is worth pausing for a moment to reflect again on this transition period, and the fact that it continues to prevent the big realities of Brexit hitting the UK.
Yes, that is correct, even if new Chancellor Rishi Sunak, seemingly singing from a similar song sheet to that of Mr Johnson’s adviser, Dominic Cummings, was talking loudly in his Budget speech about having got Brexit “done”.
Mr Sunak, who succeeded Sajid Javid after his predecessor’s departure was apparently triggered by a rift with master-of-slogans Mr Cummings, said: “We promised to get Brexit done, and we got it done.”
With the best will in the world, it was impossible not to become intensely annoyed with the “gets it done”, “got it done” mantra that littered Mr Sunak’s Budget on Wednesday. It was tiresome.
However, in terms of Brexit, it is important to realise the “got it done” slogan is not only tiresome but also paints a picture that seems to make many think the UK’s departure from the EU is over with. That there are no further consequences.
Little could be further from the truth, with Mr Johnson’s Government having so far “got done” only a technical Brexit and the main effects yet to come.
If anyone in the Johnson Government, or anyone else for that matter, wants or needs to confirm this is the actuality, they need look no further than the forecasts from the Office for Budget Responsibility issued on Wednesday.
As highlighted by The Herald yesterday, the OBR has laid out the major loss of tax revenues for the UK Government arising from the Conservatives’ move to “bear down” on immigration.
The OBR projects the new migration system will reduce the UK economy’s potential output, flagging downward effects on the working-age population, employment and taxes.
It calculates that, by 2024/25, the annual upward impact on public sector net borrowing arising from the new migration regime will be £1 billion. By 2024/25, the changes to the immigration system are forecast to cost an annual £1.5bn in terms of lost tax receipts, offset only partly by an anticipated £500 million reduction in welfare spending.
So the cost of the immigration move, while not mentioned by Mr Sunak, is very substantial indeed. Brexiters might not want to hear the OBR projections but they should listen.
The OBR’s forecasts are not surprisingly entirely at odds with the picture painted by some Brexiters of immigrants being a drag on the economy. Quite the opposite is of course true, as a raft of research shows, with many experts having highlighted the particular importance of immigration to a UK economy facing demographic challenges in terms of working-age population. These demographic challenges are particularly acute in Scotland.
Colin Borland, director of devolved nations at the Federation of Small Businesses, warned recently in a column in The Herald that “the clock is now ticking for small employers and the local economies they support”, flagging the need for an immigration system that meets these firms’ needs.
It was refreshing to observe Mr Borland dispelling some of the myths around immigration – notably the tiresome “cheap labour” jibe favoured by some Brexiters – and lay out the realities for businesses of recruiting the employees and skills they need.
Mr Borland said: “Far from the caricature of employers going out to Eastern Europe and hoovering up swathes of cheap labour, 89 per cent of Scottish small businesses with EU staff hired them when they were already living here. They were simply the best candidate for the job.”
And he cited the example of one hotelier, who had raised wages by 10% to 15% year-on-year and invested heavily in an employee-benefits package in an attempt to recruit, but who still struggled to hire.
Mr Borland also touched on FSB research published last year showing immigrant-led small and medium-sized enterprises provided about 107,000 jobs to employees in Scotland. And immigrant-led SMEs in Scotland were estimated to have generated £13 billion of revenues in 2017. Mr Borland observed that about 40% of such businesses were started up by immigrants from the EU.
From an engineering sector perspective, Mr Sheerin has described the Tory points-based immigration plan as “disturbing news”.
He noted engineering companies in Scotland were already struggling to hire semi-skilled staff and observed the salary thresholds in the Conservative immigration proposals “remain above ordinary operator level”.
David McDowall, chief operating officer of Aberdeenshire-based craft brewer and bar operator BrewDog, has said the UK Government’s immigration proposals will have “more impact on the future of our industry than almost anything else we have heard over the last few decades”.
He warned the proposals would destroy the diversity of the workforce in the hospitality industry and lead to the closure of restaurants, bars and cafes.
Mr Jack conceded earlier this month that the Johnson Government’s proposals to end freedom of movement of people between the UK and EU countries will create “genuine difficulties” for some employers. He acknowledged that challenges faced by the tourism, hospitality and agricultural sectors were “real and require to be addressed”.
It is at times difficult to comprehend why Mr Johnson and some of his senior ministers continue to ignore the consistent and reasoned pleas of business over immigration – why they apparently just do not want to listen – especially given that even the Scottish Secretary has noted difficulties. After all, the Conservatives, rightly or wrongly, have traditionally been regarded as the party of business.
Then again, you listen to the tone of the Budget. The patriotic noises about Brexit.
And it all suggests the Conservative Government is determined to continue with its ideological dream, one it has whipped up voters at both ends of the political spectrum to support, seemingly regardless of the hit to the economy and living standards. In short, the Conservatives seem prepared to damage businesses, the economy and the public finances for the sake of their ideology.
Businesses are rightly showing alarm over immigration, and the UK’s future trade relationship with the EU. But there is absolutely no sign those who have wrenched the UK out of the EU, seemingly content in their ideological dream, are going to wake up any time soon to address the real effects. Some may be well aware of these realities, but will carry on regardless, as we should know by now.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel