Coalition proposals to limit the number of non-EU citizens UK firms can employ have angered City bosses, the Observer reports today.
Leading City employers are furious about the limits being imposed by the government on the number of non-EU citizens they are able to employ and are urging a dramatic rethink of the government’s policy.
The financial district prides itself on its cosmopolitan workforce and is concerned that the quotas on migrants being set by the coalition will make it impossible for them to keep operating effectively.
A senior City source described the new rules as a “disaster”. Firms were told the implications of the policy by the government last week. Industry sources said that some top City companies believe they will be restricted to hiring as few as six non-EU nationals during the remainder of the year.
The immigration policy is being introduced at the same time the Square Mile is moaning about unpopular taxes and the Financial Services Authority’s warning that 2,500 City companies would be covered by its bonus tax. Some experts reckon all these factors together could make London a less attractive location for major international firms.
Stuart Fraser, chairman of the Corporation of London’s policy committee, said: “With all these things, it’s as if we’re saying if you’re talented in finance, don’t come here.”
Employers’ body the CBI said it was in dialogue with the Home Office over the migration caps while the City’s trade body, the Association for Financial Markets in Europe, said its members were worried: “There is a concern that it will become more difficult to move people around their businesses on a global basis.”
The CBI was reluctant to criticise government policy, saying it “remains of the view that a managed migration policy which meets the skill needs of the economy can operate within a cap on immigration”.
A spokesman added: “Last week saw the first communication with companies about the interim cap. Naturally, there will need to be a dialogue to resolve any issues”.
Fraser said he was concerned a numeric cap would always be problematic and that a points-based system such as the one used in Australia might be more effective. He felt that the individuals currently being affected – highly skilled, high-earning taxpayers – were not the ones the restrictions were aimed at. The government is consulting on its immigration policy until September.
The concerns were raised as the UK’s major banks prepare to publish figures for the six months to end of June. Bailed-out banks Lloyds and RBS are expected to return to profit. The improvement is likely to be dramatic at Lloyds, after it revised up the consensus for its figures this weekend to £1bn. That compares to a loss last time.
Banks with big investment divisions such as Barclays are likely to suffer amid predictions of falls in profits of up to 40% in some divisions. Even profit rises in their high-street operations may not cushion the declines. Source: Guardian online.
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