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Cameron Immigration Crackdown Leaves Firms Desperate for Workers

  • Acal CEO says limits made it tough to find skilled engineers
  • Industry pushes for looser rules as U.K. `Brexit' vote looms

Nick Jefferies can’t find enough engineers.

The 50-year-old chief executive officer of Acal Plc spent “months of trawling, months and months and months," to fill 40 positions he badly needed to continue morphing the former British logistics firm into a provider of advanced design to defense, aerospace and energy companies. That task was made harder by ever-tighter U.K. immigration laws that make it too difficult and expensive to hire personnel from outside Europe, he said.

In the end Jefferies filled the jobs by hiring from other U.K. engineering firms rather than bringing in candidates from places such as Australia and Canada. Finding employees has been so hard that it’s hurting the bottom line, making the U.K. "the one area of disappointment" in an otherwise rosy growth picture for his company, he said.

Jefferies’ complaints, echoed by industry groups, show the real-world effect of anti-immigrant sentiment in the U.K., which has helped lead the country to the brink of a vote on leaving the European Union. David Cameron, the Conservative Party prime minister, is trying to cut immigration -- ranked in most opinion polls as voters’ No. 1 concern, and stoked by strident tabloid coverage -- any way he can. His government has fallen far short of a pledge he made in the 2010 election campaign to cut "net migration," or arrivals minus departures, to less than 100,000. In the 12 months to June, the figure was a record 381,000.

As an EU state, the U.K. can’t restrict inflows from any of the bloc’s 27 other countries except the newest member, Croatia. In his attempt to renegotiate the U.K.’s membership in the EU, Cameron unsuccessfully sought the legal tools to do so. The prime minister aims to wrap up a deal in Brussels this week, after which U.K. voters will be asked to decide in a referendum as early as June whether to stay in the EU.

That means for the foreseeable future, the only way to lower immigrant numbers is by cracking down harder on non-EU migrants, including those from important trading partners like the U.S. and China, and citizens of Commonwealth countries that used to enjoy favorable status in the U.K.

Some business leaders are particularly concerned about the impact of the rules as the British economy grows, increasing demand for workers. Gross domestic product has expanded for 12 straight quarters, and unemployment, at 5.1 percent in the fourth quarter, is at its lowest in a decade.

System’s Limits

“Economic growth has picked up and we’ve started to hit the limits in the system,” said Neil Carberry, the director for employment and skills at the Confederation of British Industry, a lobby group. “The CBI is really clear that we should not have a system that is stopping skilled people getting into the country when they are going to be hired.”

The routes to entering the U.K., even for foreigners with advanced degrees and job offers, have been narrowed since Cameron was first elected in 2010. The U.K. has eliminated a visa that allowed graduates of British universities to stay and look for work, imposed an annual cap on entries by skilled workers and forced foreigners transferred into Britain by their companies to leave after five years, with no route to staying.

Even tougher measures may be on the way. Cameron last year instructed the Migration Advisory Committee, an independent body that recommends policy measures, to find ways to "significantly reduce" arrivals from outside Europe.

‘Skills Charge’

In January the body suggested raising minimum salaries, thereby cutting off foreign candidates from lower-paying roles, making it harder to bring in workers for specific projects and having companies pay an annual "skills charge" of 1,000 pounds ($1,430) for each immigrant they employ. Those recommendations are now being reviewed by the government.

Stricter English-language requirements are also keeping some workers away. High-end carmaker Aston Martin has had trouble bringing in Japanese engineers who are highly qualified for design work but struggle with their fluency in English, CEO Andy Palmer said. To hire closer to home, "there are just not enough people out there," said Palmer, a former executive at Nissan Motor Co.

The successive changes have been strenuously opposed by business groups, which argue the government risks pushing highly skilled jobs to more hospitable countries and losing out on bright young graduates. Politicians "have responded to the situation in a crude and very simplistic way, and it’s damaging the country, especially now that growth is good and unemployment is down,” said Simon Walker, the director general of the Institute of Directors, which represents companies.

May’s View

The IOD is among organizations that have lobbied for more relaxed rules, to little avail so far, Walker said.

Political considerations make it unlikely that the ruling Conservatives will agree. Immigration policy is the responsibility of Home Secretary Theresa May, whom political analysts say will be a strong contender to eventually replace Cameron if she can rally the party’s anti-immigration right flank. She’s taken a hard line in speeches and policy briefs, on one occasion last year saying that having too many migrants makes it "impossible to build a cohesive society."

“The engineering industry, like many others, needs to reduce its dependency on migration and -- as the economy continues to grow –- employers must do more to recruit, train and retain British workers,” the Home Office said in a statement.

The increasingly complex rules are raising costs for companies, said Chris Magrath, head of immigration and employment law at London law firm Magrath LLP. "We have three people on site at a major international bank," Magrath said of one client. "They have another four or five just monitoring it just to make sure it’s working,” he added. “I guess Theresa May is creating jobs.”

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