The elite of the City of London have issued an impassioned appeal to prime minister Theresa May to maintain an open attitude to skilled immigration, arguing that the issue is just as important as retaining access to the EU’s single market for trade and services.
At the weekend, Mrs May said she would negotiate for single market access, but not at the expense of allowing free movement of people.
Sir Win Bischoff, chairman of JPMorgan Securities and of the Financial Reporting Council, told the Financial Times: “The government quite correctly characterises the UK as being an open economy, and is desirous of further and increased investment. It would be ironic and harmful to that policy if ‘open’ means ‘closed’ to skills necessary to realising the benefits of such investment.”
Government assurances on the issue were needed as “a matter of the most immediate and important concern”, Johannes Huth, European head of private equity group KKR said.
The comments, made as part of an online debate hosted by the FT City Network, come as uncertainty hangs over how exactly the government will balance priorities in Brexit negotiations.
The City has become increasingly concerned about the risks of a “hard Brexit”, as advocated recently by Liam Fox, international trade secretary, which could involve Britain turning its back on the single market altogether.
More than 5,000 financial services groups, anchored in the UK, rely on the single market’s “passporting” system which allows them to operate across the EU from a single regulated entity in the UK. London is by far Europe’s dominant financial hub, with 80 per cent of the region’s capital markets activities routed through the City.
The City fights to safeguard future of international workforce
There are signs uncertainty over UK’s plans on immigration controls are stifling financial hiring
Overall, 11 per cent of the City’s 360,000 workforce are from EU countries other than the UK, according to census data. But some large financial services groups say 20-30 per cent of staff are non-UK EU nationals. Fintech start-ups tend to rely on even higher numbers of immigrant labour.
Sir Mike Rake, chairman of BT, said it was “essential” to reassure EU nationals currently working in the UK “to reduce the real uncertainty that is out there and is affecting recruitment and retention. The residency of EU nationals should not be used as a bargaining tool,” he said.
Brenda Trenowden, who heads the 30% Club women’s lobby, said extending cross-border working rights must be a “top priority for the government alongside passporting”.
Other participants in the FT City Network debate spoke of the need to balance continued immigration with targeted investment in areas of the country where immigration was highest. Robert Swannell, chairman of retailer Marks and Spencer, suggested “a joined-up people and migration strategy” that could operate in tandem with Mrs May’s proposed industrial strategy. Lady Barbara Judge, chairman of the Institute of Directors, advocated the establishment of a “migration impact fund, paid for through the taxes of migrants targeted at areas of the country which are experiencing pressure on schools or housing due to a sudden rise in arrivals”.
David Morgan, the Australian-born chairman of JC Flowers’ European operations, questioned the government’s decision not to pursue an Australian-style points system for immigration. “Theresa May is mistaken,” he said. “The system does not result in the government losing control over immigration numbers to employers.”
The FT City Network is a forum of more than 50 senior financiers drawn from across the City of London.