Failing to secure suitable immigration rules for London post-Brexit could cost the capital billions, a report out today has warned.
The study, produced by the Centre for Economics and Business Research (Cebr) on behalf of the London Chamber of Commerce and Industry (LCCI), discovered that, of the 771,000 non-UK EU nationals currently employed in London, 160,000 would not be allowed to stay if forced to apply for work under the existing tier 2 visa rules after the UK leaves the EU.
The impact of this lost workforce would lead to London losing out to the tune of £7bn in economic output and £2bn in direct tax contributions by 2020, the report found.
Among the suggestions to safeguard London's talent, the LCCI is proposing EU nationals already working in the city should be issued with a London work visa following Brexit.
Capital-specific work permits, issued in a manner that would best tackle the capital's skills shortages, could then be used to control future access by overseas workers.
The report also found that non-UK workers account for a quarter (25 per cent) of the capital's workforce, compared with just eight per cent across the rest of the country.
"Immigration has underpinned London’s economic, social and cultural development over centuries, making it the great city it is today," said LCCI chief executive Colin Stanbridge. "Cebr's analysis reveals the significant contribution that migrant workers make to the modern London economy...Given their role and input it is vital to London's future that a degree of flexibility is applied if government amends the UK immigration system."
Economist and Cebr partner Vicky Pryce added: "Our research shows that London is unique in terms of its high dependence on migrant workers across a range of occupations – both low skill and high skill. There is very little evidence to suggest that businesses will be able to fill skills shortages in the absence of migration."
A Mayor of London spokesperson said: "The Mayor is keen to look at any proposals that will help London’s businesses to retain and attract the very best talent from across the globe. And ever since the referendum, he has been clear that London will remain a place where the thousands of EU nationals who contribute to our economy and cultural life are welcome."
A government spokesman said: "We are committed to leaving the EU and making a success of the economic opportunities that Brexit presents to firms in London and the rest of the UK."