An unhealthy obsession with immigration will cripple UK growth

27 June 2024

What do the following have in common?

The Mini,

Marks and Spencer,

fish and chips,

Tesco,

The Ritz Hotel,

Selfridges,

Marmite,

Boohoo?

Yes, these are all iconic British brands. But what else do they have in common?

The answer is that all these British icons were founded by migrants to the UK.

Almost 40% of Britain’s fastest-growing businesses have immigrant founders or cofounders – including major innovative startups and scaleups and such as Oddbox, Zapp, Synthesia, Zilch, according to research by The Entrepreneurs Network.

In Silicon Valley, over half of all tech and engineering companies have at least one immigrant founder – including Google, Meta and Tesla. Immigration has contributed to every country. And not just business immigration. The contributions to culture, innovation, public life, global reputation are immeasurable.

So why does so much political debate in this UK election only frame immigration as a problem which needs reducing or capping? Why, when in countless opinion polls, voters identify the state of the national health service, the economy, the cost of living as far more serious issues, do so many of those that want their votes persist in talking of immigration as a problem rather than a solution to such problems?

The Conservative government has been attacked from all sides on immigration. Mostly Britain’s news media highlights a rise in net migration since Brexit ended free movement agreements with the EU. There is little mention of the problems immigration has solved – such as subsidising resident students studying in UK’s renowned universities – a higher education sector worth over £116bn now, with untold contributions to levelling up regions, as well as science and research. Or the net benefit immigrants bring to Britain’s economy. A Resolution Foundation report this month found that recent rises in immigration had been a major factor in any GDP growth the UK economy has enjoyed.

Precious few politicians appealing to voters on 4 July mention the fact that the spike in UK immigration numbers has been fuelled by people filling public sector vacancies, especially health and care visas – which doubled from 2022 to 2023.

The bosses over-relying on non-resident labour and keeping wages low are actually in government rather than the private sector. And yet it’s the private sector and families punished with recent measures to reduce “legal migration”.

According to the Home Office’s own estimates, 40-50% of the British public won’t earn the minimum income required to be joined by their partner on a family visa.

British businesses have also been hit by an arbitrary recent hike in the minimum salary to hire talent on skilled worker visas. With no consultation whatsoever, these increases introduced by the Home Secretary James Cleverly now mean that to sponsor a programmer or software developer on a skilled worker visa, for instance, the minimum salary British employers must pay has leapt from £27,200 to £49,400 (based on a 37.5-hour week).

The massive increase to the cost of sponsoring talent comes on top of recent hikes in visa fees and the Immigration Health Surcharge (up from £624 per year to £1,035) which have left the UK an outlier, far more expensive to move staff to than other comparable countries.

As political parties spelled out further immigration changes in election manifestos our team attended London Tech Week again to answer many immigration questions from a technology sector vying with other tech hubs around the world to bring the best talent to the UK.

This year we heard a new refrain from firms at London Tech Week. It was their utter disbelief at the hikes in costs to bring staff to the UK. £49,400 may not be much for a big multinational in the capital to pay the right programmer. But such salary hikes are prohibitive for start-ups and SME’s, or even big companies needing to sponsor more junior staff – especially in regions which don’t pay London wages. So much for levelling up: this is making it harder to source staff in areas of the UK suffering chronic skills shortages.

The most heartbreaking difference between this year’s London Tech Week and last year’s was hearing from talented individuals who had paid three times what resident students pay to study in the UK and were coming to the end of their Graduate visas. Whereas last year they were excited about the prospect of a career in one of the fast-growing firms in the UK’s £1 trillion tech sector, this year many employers can’t afford to sponsor them.

Some graduates told us they wouldn’t have spent tens of thousands studying in the UK and would have studied in another European tech hub had they known the government would hike the cost for employers to sponsor them with no transition or consultation as they were now unlikely to find the work here to pay back their education debts.

We were promised an immigration system to bring Britain “the brightest and the best” from all over the world after Brexit.

The thing about the brightest and the best is they aren’t stupid. And they will go elsewhere if the next government continues to make them feel unwelcome.

(Photo by Kristina Gadeikyte / Unsplash)