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Are businesses totally unprepared for Brexit?

Napthens - June 28th 2017

A new survey, undertaken by the think tank Resolution Foundation, seems to suggest that most employers are totally unprepared for a new era of lower migration, should the proposed Brexit plans go ahead. Under the current proposals the government has pledged to deliver stricter immigration policies, which is likely to have an adverse effect on free movement of EU/EEA nationals.

With Brexit negotiations having started, the survey points to a significant gap between the types of immigration policies that employers expect the government to implement and the proposed plan. This highlights the need for businesses to ensure that they prepare fully for Brexit.

The participants were all employers who employed EU/EEA nationals and there were over 500 respondents. Almost half of these had unreal expectations of migration, when compared to the government's proposals. 17% believed that there would be no change to the current freedom of movement, whilst 30% expected the system to remain for those with a job/job offer.  The think tank warned that this was “totally unrealistic”.

This is in stark contrast to the plans of the Prime Minister, who has stated that the government will have the final say in controlling migrant numbers. Within the Conservative Manifesto they proposed to reduce net migration down to the tens of thousands. This is in addition to doubling the Immigration Skills Charge to £2000 from £1000. Two thirds of the employers surveyed have suggested that either no change to freedom of movement, or only restricting it to those with a job offer would be best for their business. This shows a clash between businesses and the government on what they believe to be best.

With regards to the near future almost half of these employers expected the number of EU nationals in their work place to remain constant, whilst 24% went as far as to expect an increase. The remaining 26%, in turn expected to see a decrease. So who is right? It’s hard to tell as before the referendum migration peaked at 335,000 and dropped as low as 248,000 at the end of the last year. Recently, statistics released by The Health Foundation revealed that there had been a monumental drop in nurses from the EU registering to practice within the UK. Just this April, 46 nurses were registered compared to 1,304 registered last July.

However, since the general election, the Conservative party has lost its parliamentary majority and now relies upon the DUP for support. This has left the balance on a knife edge and leads to uncertainty. Yet, unexpectedly, the government has just this week confirmed that they are leaving the Single Market and Customs Union, meaning that there will be no “soft Brexit”.

There has also recently been some light bought to this situation as Theresa May has proposed a new “UK settled status”. This would allow EU migrants who have been settled in the UK for five years to have rights to stay in the UK and have access to health and education amongst other benefits. The cut-off date for eligibility will be between 29 March 2017 and 29 March 2019 for new residents. In addition, there is a proposal that a two year “grace period” would be given to allow migrants to build up their “UK settled status”. However, this is still in the balance as negotiations are still ongoing and we could still see further changes.

Best practice would be; even with the limited information available to ensure that as an employer, you keep on top of the latest events and preparing accordingly, in particular the upcoming announcements on plans for Brexit. In addition, should you rely on EU/EEA workers then ensure that you target these areas and have a plan in place should you see a sudden fall in interest of EU/EEA workers. Once the government sheds light on their migration policies, you can then plan ahead for any potential changes.

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As we get closer to Brexit, we have a dedicated section of the website with the latest information for businesses.