Business leaders have slammed Number 10’s commitment to end free movement of labour in March 2019, warning it will be a “disaster” for the economy.
After yet another weekend of Cabinet divisions being played out in public, Theresa May’s spokesman was forced to clarify the Prime Minister’s position on EU immigration, saying it was “wrong… to suggest that free movement will continue as it is now."
Freedom of movement will end from March 2019, he confirmed, after which point EU nationals will have to go through a registration system. Exactly how that will take shape has still not been determined.
The comments have been viewed as shutting down chancellor Philip Hammond, who previously said full migration controls would not be imposed for some time after Brexit.
The business community – which has long feared the impact Brexit would have on its access to the EU’s workforce - warned Britain would suffer as a result.
One FTSE100 boss told City A.M. the move was “a disaster”.
“Our economy will collapse if we go through with this,” he said. “Most business people are more worried than before because they thought there would be some pragmatism in place. But this isn’t about the economy – Brexiteers are obsessed with sovereignty. They don’t care if there’s a 20-year recession.”
The recent Chevening meeting with David Davis’ Brexit team had “horrified” some business leaders, concerned that government was still not engaged enough to understand the ramifications of leaving the EU, he added.
Other business leaders raised concerns about their access to the EU's best talent and general confusion from the government's handling of the issue.
WPP boss Sir Martin Sorrell told City A.M: “If it happens, it does not make our job any easier. We rely on the ability to attract diverse talent of all kinds… This further confuses the 'debate' about the length of the transition period and increases levels of uncertainty.”
Outgoing BT Group chairman Sir Mike Rake added: “We need flexibility, speed and agility to bring in and maintain the people, highly skilled and unskilled, needed to keep our economy going.”
Virgin Money chief executive Jayne-Anne Gadhia said while the measure was expected, it would require “hard work” to prevent damaging economic growth.
“The key is to find a way for the economy to flourish if we are going to reduce population growth,” she said, pointing to the UK’s productivity puzzle as a possible solution.
The tech community was particularly angered by the move, fearing a disproportionate impact on the burgeoning industry.
Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, said: “The government’s confused messaging on immigration is increasing uncertainty and damaging the UK’s reputation as a destination for fast-growth businesses… Investors fear uncertainty, and we will not be able to continue attracting Europe’s brightest minds if we cannot guarantee that they will be welcome, and that their legal status will remain secure after March 2019 and beyond.”
Miles Celic, Chief Executive, TheCityUK, said, “Being able to access the best talent from across the UK, EU and the rest of the world is fundamental to the UK’s ability to maintain its position as the leading international financial centre. This is why mutual access to talent is one of the key priorities for the industry from the Brexit negotiations.
"We want clarity around what a new visa system and immigration criteria will look like to enable financial and related professional services firms – and other UK industries – to better plan and continue to attract and retain people with the right skills. There should also be focus on addressing digital and entrepreneurial skills gaps – essential to the UK’s globally leading FinTech sector.
"As an industry that employs over 2.2 million people right across the country, collectively pays more than £87bn in tax, and is the largest exporting industry, we are keen to work closely with government to ensure we can continue to offer the best service to customers and clients into the future.”