London Chamber of Commerce warns immigration charges will open up skills gap

Jessica Morris
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Less than a quarter of London businesses think they can afford the new charge (Source: Getty)

The London Chamber of Commerce warned today that many businesses will struggle to meet the costs of new immigration charges, leading to a skills gap.

A survey it conducted with ComRes showed less than a quarter of London business execs believe their firm can afford the £1,000 annual charge per non-EU employee which comes into effect next April.

Read more: Business groups slam proposals for new £1000 annual tax on non-EU workers

A third plan to cut costs to pay the levy and employ workers on Tier 2 visas, while 37 per cent said they'd be encouraged to train or hire British workers instead. However, if they're unable to do this, 45 per cent of firms believe it will create a skills gap.

Companies who sponsor skilled workers outside of the European Economic Area will have to pay £1,000 per employee annually under the Immigration Act 2016, with a reduced rate of £364 for small or non-profit organisations.

Colin Stanbridge, chief executive of the London Chamber of Commerce, said: "While we obviously recognise the aim behind this act, we are concerned that the charge will hit many of those for whom it was not actually intended."

Read more: Tightening rules for foreign workers is "clear threat to London"

"Our findings suggest that businesses do not always have a choice when hiring and are looking for those who have the right skills regardless of whether they are from the EEA or not."

"These charges will have a significant effect on businesses and may force some to cease trading either because they can no longer afford to or they can no longer find the skills."

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