U.S. Markets closed

The huge hole in May's immigration pledge post-Brexit

Lianna Brinded
Head of Finance, Yahoo Finance UK
UK prime minister Theresa May. Photo: Reuters

Theresa May is doubling down on her promise to curb immigration to Britain in a bid to prevent her being ousted as leader of the Conservative party, thereby removing her as UK prime minister.

But in her upcoming speech at the Confederation of British Industry (CBI) conference today (19 November) in London, there is a huge hole in her pledge which it could be one of the worst things to happen to UK businesses.

Last week, May revealed that she had agreed to a draft Brexit withdrawal bill with the European Union – a move which threw the government into chaos.  Her survival now hangs in the balance, as criticism pours in from both the opposition and from within her own party.

READ MORE: May goes to war over her Brexit deal and to keep her in power

Despite one-to-one meetings held with ministers the morning after the deal was unveiled, May lost two junior ministers and two front benchers (including Brexit secretary Dominic Raab).

Worse still, her party have begun putting together signatures to trigger a vote of no-confidence. There need to be at least 48 letters — the equivalent of 15% of MPs — for this to happen.

While reports have ranged widely on the number of letters collected, it is believed at least 20 have come through. On Sunday, Sky News asked May if all 48 letters were in, to which she replied: “As far as I know, no.

“Politics is a tough business and I’ve been in it a long time. I always think the important thing to say is: ‘What are we here for? Who are we here for?’ And we’re here for our constituents.”

When asked if the past few days had been personally challenging, she added:  “As prime minister, I’m here for the people of this country and that’s what we must put first and foremost; their interests.”

Focus (or distraction) on immigration plans


It’s little wonder why May would then seek to shift the debate, delivering a speech on migration in order to rally the hearts and minds of her most staunch Brexit-deal critics.

Immigration was the main reason Britain voted for Brexit. Being within the EU means that all member states have to adhere to the Freedom of Movement Act, allowing citizens of member states freedom to work and live in any country within the bloc.

At the conference – in front of the pro-EU business lobby group CBI, which speaks for 190,000 firms across the nation – she will try and get businesses on side by attempting to rally support for her draft Brexit withdrawal agreement.

She will insist that leaving the EU and withdrawing from the Freedom of Movement Act will prevent EU migrants “jumping the queue” or being prioritised over “engineers from Sydney or software developers from Delhi.”

Essentially, she will hammer home that immigration rules will become skills-based and level the playing field for those who want to work and live in Britain.

However, while that “sell” seems sensible, it actually reinforces one of the biggest problems businesses face and could cripple the economy.

The massive issue with her immigration pledge

The services industry — everything from shops and farms to banking and insurance — contributes more than 80% to the UK economy.

EU migrants make up a bulk of those services industries, mostly in low-paid jobs. The thinktank IPPR warned that construction firms could lose at least 120,000 EU brick-layers post-Brexit and a bulk of other industries could face major labour shortages.

Table: IPPR
Table: IPPR

“It is highly likely that Britain’s immigration policy will change post-Brexit,” said Marley Morris, senior research fellow at IPPR. “IPPR research shows that some sectors in the UK economy are now highly reliant on EU nationals in lower-skilled jobs. Britain’s low unemployment and inactivity rate and the geographical spread of jobseekers means it is difficult to see British workers easily taking up these roles.”

But when it comes to the “highly-skilled” this doesn’t necessarily mean that it’ll be easy for those migrants to come over or that businesses will be able to plug the gap.

According to Oxford University’s Migration Observatory, companies now have to offer salaries over £60,000 ($77,213) to bring non-EU workers to the UK, making  80% of professional jobs ineligible for visas. 

Overall, Britain’s economy faces huge issues over May’s immigration pledges. At the CBI conference today, she’ll have to do a lot more to convince businesses that her deal is worth fighting for.

Graphic: PA