UK Immigration: Striking the Balance
3 October 2014
As featured in Re:locate magazine, Smith Stone Walters Director James Walters discusses the challenges facing the UK government in encouraging the UK economy through attracting inward investment and international talent against a background of negative immigration press. He believes that the UK must send a clear message overseas: Britain is open for business.
A hard nut to crack…
Striking the right balance between having a tough immigration policy and strongly encouraging international business and investment has always been a very hard nut to crack. This is especially the case when there are so many negative immigration reports in the press, the weight of public opinion generally seems to be against immigration and we face an up and coming general election where immigration is going to be a key issue. Much confusion exists among the general public where opinion seems to be that all immigration is tarred with the same negative brush whether it be family, European, students, investment, business or highly skilled migrants. This confusion is further complicated by the ill-advised manifesto promise of the current government to cut net immigration to tens of thousands when they had absolutely no control over the number of European migrants able to enter, work and reside within the United Kingdom. That horse had already bolted and left the government with no other choice but to tinker with the non-European immigration categories some of which would have been better off left alone. It is against this backdrop that policy makers have the difficult task of attracting the world’s “brightest and the best” and encouraging overseas firms to choose to invest in the United Kingdom whilst giving the public confidence that we have full control of our borders, are protecting the local labour market and keeping out those who do not qualify to be here. No easy task.
Overseas businesses reluctant to come to Britain
In respect of business and investor immigration we are in an unusual position. With some exceptions the current policies do generally support inward investment and international business and, although application processes are very expensive and rather bureaucratic, they do work and are relatively fast. However, many overseas businesses are pessimistic about coming to Britain. During recent UK Trade and Investment (UKTI) missions in India and China, I repeatedly heard from foreign businesses that, although they believe the UK is the right place for their business to expand, they are very nervous about the tough immigration process and had the impression that in Britain the borders are closed. They questioned the point of going through the cost and effort of setting up a United Kingdom operation if they were then unable to send staff with the appropriate skills and experience to get the project off the ground. These views are a great disappointment and make the work of the UKTI exceptionally hard. In reality a huge push on PR is needed, with a clear message being sent to the international business community that Britain is open for business. However, this is very hard to achieve when the government needs to be seen as being so tough on home soil and barely a week goes by without another negative immigration story in the press. Although all areas of immigration present their challenges, the United Kingdom desperately needs positive investor and business immigration policies that support inward investment and job creation.
Stubborn policies act as a barrier to investment
A recent example of where current UK policy did not support inward investment was a project I was working on in 2013 with a large Japanese restaurant chain. The group has ambitious expansion plans for the United Kingdom which included a multimillion pound financial investment and significant local job creation. In relation to opening their flagship West End restaurant, the group felt it would be imperative to transfer some of their top chefs to the United Kingdom for just the first six months of the project. This would not only ensure that the standard of cuisine was exceptional from the outset but would also help with the training of local staff. These would not have been long term transfers and therefore would have absolutely no impact on the labour market aside from providing expertise to local workers. However, under the immigration rules Chefs are not permitted to enter the United Kingdom under the Intercompany transfer route and can only qualify under the Tier 2 General scheme which requires a difficult English language requirement to be met. Whilst we fully understand the need for the English language requirement for Tier 2 General hires, it was totally irrelevant in this scenario and acted as a barrier to investment and the success of the project. Prior to the current Points Based System (PBS), which has been in place since 2008, provisions existed for flexibility where inward investment and job creation could be demonstrated. The implementation of PBS saw the removal of any discretion, but given the worldwide competition that Britain faces for inward investment projects it is time for this discretion to be returned.
So what does the future hold?
Despite these difficulties, the UKTI and London and Partners are making some progress in encouraging overseas investment. London and Partners, which has responsibility for promoting London to the world stage in respect of tourism and investment, reported that to the financial year 31 March 2014, 4407 jobs were created through foreign investors that they supported. The gross added value to the London Economy for this period was £100 million. Across the country the FT FDI intelligence has reported that there was US$26.5 billion foreign investment into Britain in 2013. So some progress is being made and London certainly got a boost on the back of the hugely successful 2012 Olympic Games. So what does the future hold? With a global economy and the internationalisation of businesses continuing to expand, it is essential that the United Kingdom is seen as an attractive country for growth and investment. At the same time, the UK government has to control borders and give the public confidence that we have an immigration system that works. So striking the balance will continue to be key along with some much needed education that should result in a greater understanding of the benefits that a good business and investment immigration policy brings to the country.
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