Budget 2013: Immigration ought to be encouraged to support economic growth – but don’t hold your breath

Across the country the very firms which are supposed to be seizing opportunities to return the economy to growth are encountering the tangle of immigration regulations which obstruct a significant part of their business plans to win export orders and expand into new markets.

Don Flynn is the Director of the Migrants’ Rights Network

Immigration will not figure large – or at all – in the chancellor’s speech tomorrow. Mr Osborne is unlikely to want to confuse the supposedly good news story coming out the Home Office which tells of progress towards reducing net migration to the tens of thousands with his budget announcement.

But things have been going on behind the scenes which show the government is bending to some of the pressure being applied by business interests to slacken some of its more rigid policies.

From early April, new immigration rules will exempt some high value immigrants from the need to prove adequate knowledge of English as well as ending a ‘cooling off’ clause which requires skilled workers on employment contracts to absent themselves from the UK for 12 months in between jobs.

STEM subject graduates with higher level qualifications will have some of the rights to post-study work lost during the last phase of government reform restored, allowing them easier access to jobs in the science and technology sectors.

Is this enough to allow immigration policy to fulfil its potential to contribute towards returning the UK economy to growth?

Not according to Jonathan Portes, head of the NIESR. In a piece in the Observer last weekend, he called for more sweeping measures to liberalise immigration policy, describing it as a means to boost growth in the short term and improve productive capacity in the medium term.

Neither does this hold true for tech companies which aim to be part of the industrial renaissance which is suppose to re-balance the UK economy in favour of manufacturing. The report published yesterday by the Social Market Foundation has revealed an annual shortfall of 40,000 STEM subject graduates from UK universities ready to work in the businesses that are expected to lead the revival.

The government has proclaimed the fairness of its immigration policies, which it says still leave the UK open to the “brightest and the best” who can make a really significant contribution to the UK economy.

But closer to the coalface of British industry the call is not so much for the super-excellent elite, but rather the “merely very good worker” who is motivated and equipped with the skills which companies need to regain their competitive edge.

The problem is well-illustrated by the situation of businesses whose growth is expected to aid the UK in returning to prosperity.

The CIPD report published last week gave a good picture of the problems they are encountering as the result of immigration policies which presume that the right to employ non-EU workers should be reserved to very large businesses which can afford the enormous costs associated with navigating the UKBA’s ‘licensed sponsor’ compliance regime.

Businesses are expected to have in-depth knowledge of the current state of immigration regulation but often get a poor level of support in the way of training and responses to queries from officials.

Across the country the very firms which are supposed to be seizing opportunities to return the economy to growth are encountering the tangle of immigration regulations which obstruct a significant part of their business plans to win export orders and expand into new markets.

As a consequence of this squeeze smaller and medium size companies in particular are pegged back in their plans to take on more workers from the resident UK portion of the labour force.

A budget that is really geared towards getting growth back into the economy would do the daring thing of elbowing its way onto the Home Office’s immigration policy terrain and proclaim a growth strategy that is not just geared to the needs of the elites in their search for the brightest and the best, but also encompassed smaller businesses who want to incorporate migrant workers who are just plain good at what they are doing into their plans for growth.

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