Globe, Migrants, Multiculture, United Kingdom

New immigration system, Brexit and UK economy

With over 460,000 immigrant-owned businesses and more than 3.5 million in the workforce, it is evident that the contributions of immigrants to the UK economy cannot be overemphasized.

 

Olusegun Akinfenwa*

 

About half of the fastest-growing businesses in the UK are owned or co-owned by foreign-born founders, and these immigrant-owned businesses have over 8 million people on their payrolls.

However, going by the UK new immigration system, questions arise as to whether the region will be able to sustain its decades of economic growth if it starts closing its borders to certain immigrants as the policy goes into effect in January.

In the UK entrepreneurship, skilled and unskilled labour sectors, foreign nationals have made a tremendous impact and demonstrated they aren’t pushovers. A good number of them hold critical roles in top industries.

A report by the Centre for Entrepreneurs and DueDil shows that there is a higher likelihood for immigrants to start businesses compared to native Britons and also at a younger age.

In the UK key sectors like healthcare, manufacturing, and IT, immigrants from Europe, Asia, and other continents are significantly represented.

In the health sector, for instance, more than one-third of pharmacists, doctors, dentists, and more than 20% of nurses are foreign-born. About 10.3% of all foreign-born run companies in Britain are in the real estate and construction industry.

Clothing, jewellery, food and other consumer goods are produced by 7.6% immigrant-owned businesses just as 6.1% of IT firms are also run by migrant entrepreneurs.

They also account for 3.2% of management consultancy outfits as well as 3.1% of media and entertainment firms.

In the unskilled-labour sectors, immigrants contribute immensely to the growth and sustenance of many strategic industries, including doing those jobs that many native Britons are unwilling to do.

The hospitality and food processing industry is one of the sectors that rely heavily on low-skilled foreign-born workers to function. Many hotel, bar and restaurant staff fall within this category.

Care for the elderly is another sector that benefits significantly from the contributions of foreign-born low-skilled workers, especially as the UK ageing population grows.

A report by the Migration for Development (M4D) shows that 3 in 5 of London’s care workforce are foreign-born and about 9 in 10 of its migrant care workers are from outside of Europe.

All these wouldn’t have been possible without the UK’s decades of immigrant-friendly policies, which encouraged people from all walks of life to enter the region and fulfil their dreams.

In past years, the United Kingdom represented an epitome of a migrant-friendly atmosphere which made it one of the world’s top destinations for people from all continents.

The inflow did not only help in economic stability, but it was also leveraged for population growth as net immigration rate surpassed the homegrown population increase. Between 1991 and 1999 there was an average of 104,000 net immigration per year, compared  with 107,000 homegrown population rise.

In England and Wales, for example, the 1998-1999 net inward population rise increased to 194,000 while natural population rise fell to fell to 72,000.

Immigrants not only did they leverage this trend for business and career growth, but a good number of them also acquired UK citizenship via naturalisation.

A 2018 report shows that 39% of foreign-born claimed they are UK citizens. Going by their contributions to the UK and their records of personal achievements for themselves, it is safe to say that the past decades have been mutually beneficial to both parties – the United Kingdom and the immigrants.

However, with the recent constant calls for more stringent immigration policies, especially as we prepare for the last lap of Brexit, there may be unpleasant effects on various sectors of the economy.

The United Kingdom, as part of its overhaul of immigration laws, will be closing its borders to unskilled workers and those who cannot speak English.

While the new point-based system does not affect the family visa application process, such as fiancée and spousal visas, it is set to change the way people come to work in the UK.

Part of the new criteria is that anyone coming to the UK for employment purpose must have an employment offer with a salary threshold of £25,600 or £20,480 in special cases where there might be a shortage of skills. There may also be an end to self-employed people immigration, which may restrict artisans from EU and non-EU countries from coming to the UK to practice their trades.

Many observers and industry leaders believe that these plans would end the cheap labour era in the UK and will mostly affect warehouses, factories, restaurants, hotels and other sectors dependent on low-skilled workers.

According to Unison these policies “spell absolute disaster for the care sector”.” Hospitality industry players also view the plan as disastrous as they assess its possible impact on their businesses.

“Ruling out a temporary, low-skilled route for migration will be disastrous for the hospitality sector and the British people”, says the UK Hospitality chief executive, Kate Nicholls.

There is bound to be a shortage of hands in many industries that are reliant on low-wage immigrant workers.

While some may be able to adjust through labour-saving techniques, such as the use of machinery many would find it difficult to cope with and may be forced to produce less, source other alternatives for labour, or go out of business.

Some employers may also have to explore the option of outsourcing their jobs to overseas workers.

As the new immigration system becomes effective in January 2021, businesses will have to start adjusting to the new reality and prepare accordingly.

*Olusegun Akinfenwa is a political correspondent for ImmiNews.

(Photos: Pixabay)

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