Immigration and Social Security Co-ordination (EU Withdrawal) Bill

Written evidence submitted by the City of London Corporation (ISSB32)

IMMIGRATION AND SOCIAL SECURITY COORDINATION

(EU WITHDRAWAL) BILL

PUBLIC BILL COMMITTEE

 

Submitted on behalf of City of London Corporation

Submitted by the Office of the City Remembrancer

Introduction

1. The City Corporation works with partners in the financial and professional services industries to secure a thriving city, supporting a diverse and sustainable London within a globally successful UK. The City of London, and the UK brand it represents, is a European and global asset, which helps fuel business development, infrastructure, jobs and growth in Europe and across the world. The future relationship between the UK and the EU is therefore vital to the economic welfare of both. Access to talent is an important aspect of that relationship.

2. In clause 1 and in schedule 1 the Bill proposes to end the current system of freedom of movement across the EU. The repeal of free movement offers an opportunity to consider the design of a future system.

3. To retain its status as the leading financial and professional centre, the UK must continue to attract and to have access to the best talent. This should include home-grown talent alongside talent from across the EU and from the rest of the world.

4. People and talent are more crucial than ever to business operations, decisions and global competitiveness, so the City, London and the UK must remain a welcoming and attractive place for people to work and study [1] . A Global Britain requires global talent.

5. Immigration Rules, including those currently in force, are made by the Secretary of State under powers contained in the Immigration Act 1971. Changes to the Rules are presented to Parliament but, invariably, are not subject to formal scrutiny. The Public Bill Committee may wish to consider inquiring into the approach proposed by the Government to allow parliamentary scrutiny of the Rules that will apply post-Brexit.

Financial and Professional Services

6. London has the largest financial services cluster in the world [2] . With nearly 60,000 companies, London has almost 1.5 times more than Luxembourg - which ranks second. The financial services sector accounts for 3.4% of the UK workforce - the majority of that workforce, two thirds, is outside London. The sector generates a notable 6.6% of economic output and provides 10.9% of total UK Government tax receipts [3] . The sector contributed £75 billion in taxes in 2017-18 [4] . To give a sense of scale, that is half of the UK Government’s spending on health [5] .

7. The UK’s status as the leading professional services centre is the key contributor in attracting other professions and workers. This clustering effect is particularly notable in relation to fintech and other tech companies. London is home to 16 companies that were ranked in the Top 50 Fintech Companies by KPMG & H2 Ventures in 2017 – more than any other city worldwide. The UK fintech industry is worth £6.6 billion to the UK economy [6] .

8. This position as global leader is supported by a global talent. That pool of talent and expertise currently assembled creates a competitive advantage and in turn attracts others who choose to work here. Currently, international workers make up 40% of the workforce in the Square Mile (compared to 18% across the UK) and of that group almost 2 in 6 are non-UK EU citizens [7] .

Access to Talent in the Future

9. Clause 4 of the Bill proposes wide-ranging regulation making power for the Secretary of State and those powers include the modification of primary legislation passed before or during the parliamentary session in which the current Bill is enacted. Clauses 4 (6) to (9) provide detail about the nature of that parliamentary scrutiny. While regulations made under this power would be subject to some parliamentary scrutiny, future Immigration Rules will not be made under provisions in the Bill. This might mean that parliamentary opportunities to scrutinise the Rules proposed to govern any future visa arrangements may be limited. Therefore, it is timely to consider the practicalities of what changes could be made to ensure a future visa system is world-leading and that it enables rather than deters business, trade and talent.

10. The Home Office continues to develop its visa service delivery and it is important to acknowledge these and the overall direction of travel, which is promising. Prominent examples include the introduction of an electronic visa scheme, limited in scope to initial entry to the UK only and the development of a user ‘hub’ which will pull together feedback from various parts of the visa application process to drive improvements. The Settled Status website appears to be working well.

11. After Brexit, it is essential for the UK to adopt an immigration system which allows firms and entrepreneurs to access the global talent they need, and is easy to navigate. The Government should grasp the opportunity to adopt new policy approaches towards EU migration. The City Corporation’s research provides detailed analysis of how a future visa system can be configured [8]

12. Aside from the question of who should be eligible to work in the UK, the user experience of the visa application and approval system is crucial to ensuring the UK is both open and attractive to talent – not just for EU workers, but for workers across the globe.

The UK’s position in a global market for talent

13. Under the current system, businesses are able to move employees across European offices without any administrative burden. This helps London maintain its position as a global business hub. However aside from the question of who should be eligible to work in the UK, the user experience of the visa application and approval system is crucial to ensuring the UK is both open and attractive to talent – not just for EU workers, but for workers across the globe. UK and EU legislation that facilitates this system will be revoked or amended if schedule 1 of the Bill comes into force.

14. It will, therefore, be open to the UK to adopt new policy approaches towards EU migration. Consequently, it is timely to consider the practicalities of the current visa system and what changes could be made to ensure a world leading visa system that enables rather than deters business and trade.

15. As the 4th biggest funder of the arts, the Corporation is concerned to ensure artists and those in the creative industries can work in the UK. Artists have particular requirements in relation to mobility – they may be preforming in one country one week and a second country the following week. An obligation to surrender passports as part of a visa application process would severely reduce the number of artists willing to travel to perform in the UK.

16. As an example of the scale of the issue, Europe’s largest cultural centre, the Barbican Centre, has 800 non-UK EU artists booked to perform in 12 months after March 2019. If they are subjected to new restrictions or costs they may not travel to the UK. This could lead to a sharp reduction in the number of leading orchestras, artists and performers coming to the UK. For example, determining right to work status for a visit by the Royal Concertgebouw Orchestra required 1 hour of administration time and almost no cost. A visit by the Los Angeles Philharmonic required 70 hours of administration time. This would mean that if all non-UK EU performers are required to apply under Tier 5 there would be approximately £35,000 of additional visa and administration costs.

17. The Guildhall School of Music & Drama (GSMD) is provided by the City of London Corporation as part of its contribution to the cultural life of London and the nation. Overseas students are important element of intake at GSMD, one of the world’s leading conservatoires [9] . In terms of EU students, Erasmus+ is responsible for around half of all study and work abroad programmes for UK students [10] . The programme is also an important contributor to the UK’s soft power in relation to EU27 students who study in the UK.

18. The current Erasmus+ programme and funding arrangements expire in 2020. The City Corporation strongly supports the Government’s ambition to remain in the programme. However, there is concern that, in the event of a no deal Brexit, the EU may not permit the UK’s participation in the scheme. The City Corporation notes UniversitiesUK’s call for public funding for a study abroad scheme if, in the future, the UK is unable to participate in Erasmus+. The loss of Erasmus+ would be likely to have a substantial impact on student numbers given that, even while operating within the Erasmus+ programme, GSMD reports that over the past 2 years there has been a 47% reduction on EU student applications.

Top Line Recommendations for a Future Visa System

19. The City Corporation has produced detailed recommendations for the design of a future visa system. The research [11] , produced in association with leading advisory service EY, highlight four key recommendations:

1.) A future system should reduce the administrative burden and uncertainty associated with visa applications. Outdated and redundant process steps such as Police Registration should be eliminated entirely

A UK visa application is typically made up of many different processes, requirements and touch points with overlapping, interdependent and uncertain timeframes. Streamlining these steps will decrease stress for applicants, increase certainty for employers and save time and costs for Government.

2.) A future system should rely on an entirely digital immigration status so that applicants no longer need to surrender their passport or update physical status documents. Maintaining a reliance on purely physical evidence of immigration status risks our system becoming outdated and falling behind our global competitors

A digital immigration status will speed up the application process, eliminate bottlenecks associated with the production of physical immigration documents and all verifications, e.g. right to work checks, right to rent, bank checks etc. can be carried out online

3.) A future system should avoid duplicative processes associated with extending a visa inside the UK

Eliminating physical visas and intelligent use of data UKVI already holds, offers the opportunity to remove the need for visa extension applications inside the UK. Visa extensions should be facilitated by employers simply notifying UKVI via their sponsorship management system. These efficiencies will save time and costs for employers and UKVI alike.

4.) A future system should use technology and guidance to provide tailored support to employers/sponsors of different sizes and in different sectors to encourage investment and growth in the UK.

As already identified by the Migration Advisory Committee, start-ups and SMEs shouldn’t have to fight against an overly complex process. Similarly, the Sponsor Management System (SMS) should scale appropriately to support sponsors applying for larger numbers of visas by offering advanced reporting and upload features.

Conclusions

20. Consideration should be given to including the outline of a future immigration system in the Bill.

21. The importance of non-UK EU workers in financial and professional services should be given greater significance by the Government in its consideration of the UK’s future immigration system.

22. More should be done to reassure cultural and creative workers and organisations over concerns that highly skilled musicians, performers and productions specialists will be excluded by operation of the £30,000 skilled worker threshold.

23. Future arrangements for the Erasmus+ programme, or a replacement, should be clarified.

24. The City Corporation looks forward to engaging with the Government’s White Paper consultation.

City Remembrancer’s Office,

February 2019


[1] London First, 2017. Facing Facts: The impact of migrants on London, its workforce and its economy; https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Documents/Research%202016/regional-visas.pdf

[2] https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/Global-investment-driving-UK-jobs-and-growth.aspx

[3] In the year to March 2018, see https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/total-tax-2018.aspx

[4] In the year to March 2018, see https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/total-tax-2018.aspx

[5] Chart 1 Public Sector spending 2017-18, Spring Budget 2017 https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[6] https://www.ey.com/Publication/vwLUAssets/EY-UK-FinTech-On-the-cutting-edge-Executive-summary/$FILE/EY-UK-FinTech-On-the-cutting-edge-exec-summary.pdf, 2016

[7] ONS user requested data https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/adhocs/009248jobsinlondonthecityoflondonandtheregionsbycountryofbirthukeeaandrestofworldbrokendowninvariousways2004to2017

[8] ‘Streamlining Success: Building a world-class visa process for the UK’, https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/streamlining-success-the-uk-visa-system.aspx

[9] And ranked as the UK’s top conservatoire in the Guardian University Guide 2019 for Music

[10] UniversitiesUK briefing document, 5 February 2019

[11] https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/streamlining-success-the-uk-visa-system.aspx, November 2018

 

Prepared 28th February 2019