Britain will seriously suffer without an open border with Europe

A points-based immigration system won't help identify entrepreneurs or meet the demands of the 'gig economy'.

Last Updated: 27 Jul 2016

The CBI has long been suggesting that Britain faces a skills crisis. Last summer a survey of its members found that 55% feared they wouldn’t be able to find enough workers with the skills they need to grow. But now that Britain is on the brink of leaving the single market, things could be about to get much worse.

In its latest Pearson-sponsored skills survey, published today, the group found that 55% had shot up to 69%. What’s especially concerning is that the survey was carried out before the referendum – lord knows how high the figure could be now.

Of course proponents of Brexit have always said businesses don’t need to worry about losing access to Europe’s labour market. We’ll have a version of Australia’s world-famous points-based system, they said (ignoring warnings it is just as bureaucratic as the organisation they are trying to leave). But such a system will not be an effective way of meeting the demands of Britain’s increasingly fast-paced job market.

First of all it ignores the value of low-skilled labour. The belief that we only ‘need’ the world’s brightest and best migrants but don’t benefit from the legions of Europeans staffing our care homes, coffee shops and carrot fields (and paying their fair share of taxes to boot) would be amusing if it weren’t so widely-held. 

Secondly it assumes that the government is best-placed to determine the skills demands of employers. But those demands change every day and a points-based system simply won’t keep up. That’s why at present eligibility for skilled workers from outside the EU is based mainly on the salary they command – a figure that rose to £35,000 in April.

That’s fine if you’re a massive corporation prepared to wait a couple of months to bring in a new engineer, lawyer or scientist on a full-time, permanent basis. But the job market is shifting away from such rigid modes of employment. ‘Gigging’ is increasingly common, not just for couriers or Uber drivers but for consultants, designers and other white collar professionals. A salary-based system would surely close the door to these kinds of workers who are so vital to the functioning of a modern, agile economy.

Even recruiting for a full-time role can be problematic. As Second Home founder Rohan Silva remarked in his recent Evening Standard article advocating the introduction of London-only work visas, 'My own company recently looked at hiring someone from outside the EU for the first time and we were told it would cost us more than £20,000 in legal fees and take months — a huge burden for an early-stage business.' 

Perhaps worst of all would be the implications for entrepreneurship. Vast numbers of European founders make their way to the UK each year with plans to build the next big thing. At pitching events in London one struggles to move without bumping into techies from Estonia, France or Germany. Of course developers with a job offer from a big business would likely have no problem getting through the points-based system but it’s hard to see how the Home Office would be able to spot the Sergey Brin or the Elon Musk among a field of applicants.

At present non-EU entrepreneurs can apply for a visa. But if we make European entrepreneurs apply under the same terms then they will need access to at least £50,000 worth of funding. Couple that with the fact it will be easier to recruit developers from within the EU and it’s not hard to see how an entrepreneur who previously had her eye on London might opt for Berlin or Paris instead.

Negotiations are still in the early stage but it seems likely that our new government could sacrifice access to the single market in order to ‘control our borders’. That would be a double hammer blow to the economy and we would all be poorer as a result.


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