The first column from the City of London Corporation’s policy chairman
When Gordon Brown vowed to focus on “British jobs for British workers” in 2007 he (perhaps unwittingly) created a political furore.
If there is one topic likely to provoke a heated debate up and down the country it is immigration. Indeed, earlier this year the immigration cap consultation on non-EU workers prompted a wide range of responses from Nobel prize-winning scientists to large multinational firms.
As Londoners we cannot afford to shy away from this debate.
The capital’s history has been inextricably tied to immigration since Londinium was established by the Romans almost 2,000 years ago.
The City, in particular, has been a major net beneficiary of immigration. Step out on to any street in the Square Mile and you will hear languages from all corners of the world.
Our openness to talented individuals regardless of race, nationality or background plays an integral part in maintaining London’s status as the world’s pre-eminent financial centre.
Leading international companies choose to be based here not out of loyalty but because it is an attractive business environment in which to operate.
It is important to note that this is not just a financial services issue: IT, life sciences and many other industries all rely on accessing a global talent pool
They need the best staff, irrespective of their passports, and in a hurry. If they cannot attract skilled workers because of excessive barriers to entry they will simply take their business elsewhere – or, at least, internationally mobile parts of it such as wholesale banking.
The importance of foreign workers to London’s continuing prosperity is demonstrated by the fact that foreign-born staff fill 13.1 per cent of higher-skilled posts across the country, but 33 per cent in London.
It is important to note that this is not just a financial services issue: IT, life sciences and many other industries all rely on accessing a global talent pool.
Immigration is, understandably, an emotive subject given concerns about its impact on jobs and communities.
The government has pledged to bring net migration down to “tens of thousands” by the end of the Parliament and without doubt there is a political imperative to ensure the system is not abused.
The City worked closely with government during the recent immigration cap consultation on Tier 1 and Tier 2 economic migrants from non-EU states. Significant concessions were secured on high earners and intra-company transfers that will make it easier for internationally facing London firms to meet their business needs.
Flexibility is particularly important in industries that are subject to changes in the business cycle. In the past few years the City has experienced huge swings and financial institutions have to adapt to these changes rapidly.
This means a blanket numeric cap based on the recent past would have forced us to turn away talented individuals as market conditions changed. Thankfully we reached a workable solution.
Skilled workers, particularly in financial services, are not a burden on the state; they generate wealth and are positive contributors to the UK economy and indeed to wider society.
Clearly skilled workers in the City generate substantial amounts of income for the Exchequer both through direct and indirect taxation.
The City accounts for 10 per cent of GDP, £53bn in taxes to the Exchequer and over 300,000 jobs across London. The £18bn paid in income tax alone accounts for 15 per cent of the UK total.
That is why the concept of “British jobs for British workers” is fundamentally flawed. Our openness to international talent and institutions helps to create jobs that would otherwise not exist
Meanwhile, skilled foreign workers in the City receive comparatively little in terms of public expenditure.
These people work in highly mobile global business areas and if we give the impression that they are not valued, other jurisdictions will gladly welcome the revenues they generate.
The money they pump into the economy benefits all sorts of trades across London, from taxi drivers, hotels, restaurants, to the local corner shop. They are also likely to be highly trained in skills that are passed on to British workers and businesses.
That is why the concept of “British jobs for British workers” is fundamentally flawed. Our openness to international talent and institutions helps to create jobs that would otherwise not exist.
London and the UK need a predictable, transparent and flexible immigration system. The government has promised to show the UK economy is open for business.
That means we must remain open to the very best that the international business community has to offer.
Stuart Fraser is policy chairman at the City of London Corporation. Read Sophie Hobson’s interview with Stuart Fraser.