23 February 2018
"Access to people as important as future trade deal with EU"
Carolyn Fairbairn, CBI Director-General, will say businesses need time to adjust to new migration rules to safeguard investment in a speech later today (Fri).
Following official figures confirming fewer EU workers coming to the UK, Carolyn will say why a ‘substantial transition period to a new migration system’ will be needed.
Speaking at a CBI event at Babraham Hall in Cambridge on productivity, the CBI Director-General will urge the UK Government to provide ‘clarity and certainty over migration policy - now and in the future’ to maintain investment in the UK.
She will also encourage the government to guarantee EU citizens’ rights even in the event of ‘no deal’ scenario, highlight firms’ need for a period of adjustment to a new migration system and outline why the Tier 2 non-EEA visa route is not appropriate for EU nationals.
Carolyn will propose the UK should have a more controlled yet open arrangement with the EU, reflecting 40 years of economic integration. She will add that with record employment rates, limiting access to EU workers would leave companies unable to get the staff they need to grow.
Setting out how the UK economy is already being affected, Carolyn will say:
“One issue absolutely vital to productivity is business’ access to people and skills.
“With record employment rates - and without access to EU workers – firms are unable to get the staff they need to grow.
“For business, this issue is as important as our future trade deal with the EU.
“Put simply, skills shortages threaten to slow down growth.
“Training British workers isn’t enough on its own, nor is just hiring from overseas - business needs both.
“The foundations of a great system are in place - in employer-led apprenticeships, T-levels and in the new National Retraining Partnership which every day helps people get back into work.
"But shortages are deterring investment today."
Explaining how lack of access to skills and labour is already affecting firms, Carolyn will say:
“Let me tell you a story that illustrates the scale of the problem.
“A local construction firm was about to start work building a new factory.
“But the client, a chicken producer, had to cancel the project.
“Why? Because they couldn’t get the staff to fillet their chickens.
“So, in short, they couldn’t justify the new factory.
“Problems finding the right people don’t just affect the company looking for workers, they have a knock-on effect on the whole supply chain, creating a vicious cycle.
“Uncertainty deters workers and halts investment.
“This hits a firm’s bottom line, so businesses scale back their investment. The economy and public services suffers, which means less money for schools, roads and yes, for our NHS.”
Labour shortages aren’t exclusive to lower-skilled roles, they’re having an impact right across the economy, Carolyn will say:
“We’ve spoken to businesses in the Cambridge tech hub.
“They’re worried that Brexit will put off overseas workers who don’t know if they’ll be welcome, or even allowed to stay.
“One business, Cambridge Medical Robotics, rightly asked…
‘“If our competitors in Silicon Valley can have their pick of people from around the world, why do we think it’s a good thing to deny ourselves the same ability?”’
“And we know from the Federation of Small Business that one in five small businesses rely on skills and labour from the EU.
“Let’s remember - this isn’t just about the best and brightest – it’s about giving companies of all sizes access to the skills and labour they need to succeed.
“This is urgent.
“Business is looking for answers – but is being met by silence.
“Uncertainty about access to European workers and delays to the immigration White Paper have left businesses frustrated.
“In conversations with firms in every region and nation, we’re hearing the same thing.
“We need clarity and certainty over migration - now and in the future.
Providing a pathway to certainty over migration for firms is a three-step process, Carolyn will add:
“First, let’s end the game of human poker by telling EU citizens that they’ll be able to stay in the UK – crucially - even in the event of a no-deal scenario.
“Second, no matter the outcome of talks in Brussels, business needs to know that when Freedom of Movement as we know it ends there will be a substantial transition period to the new rules on migration.
“Once agreed business will need time to adjust to the new rules.
“Because, without time to prepare, investment will continue to stall.
“Third, we need to say ‘no’ to extending the ‘Tier 2’ visa route to EU citizens.
“It is costly, complex and unaffordable for smaller businesses.
“Copying and pasting the Tier 2 system would be a disaster for the UK, damaging competitiveness and stopping businesses getting the people and skills they need to compete globally.
“Instead we need a system which gives firms the confidence to keep investing in every part of the UK.
“One that ensures that firms of every size and sector get the talent they need for years to come.
“So now, let’s stop talking about it and instead get it sorted.”
Notes to Editors
Other guests at the productivity event include Deputy Governor of the Bank of England, Sir David Ramsden; CEO of London Stansted Airport, Ken O’Toole; CEO of Green Energy Options, Patrick Caiger-Smith and Professor Iain Martin, Vice Chancellor of Anglia Ruskin University and Barclays Corporate Director-Eastern Region, Duncan McCunn.