City groups have criticised the Conservatives' post-Brexit immigration plan and said dismissing low-skilled workers would harm businesses and the UK economy.
Home secretary Sajid Javid unveiled a new policy to prioritise highly skilled workers and end freedom of movement within the European Union.
Business groups said a number of sectors, such as retail and construction relied heavily on so-called “low-skilled workers” and also called for the government's net migration target to be dropped.
CBI director general Carolyn Fairbairn said: “Freedom of movement is ending and firms understand that.
“But the Prime Minister's proposals for a new system have taken a wrong turn by dismissing the importance of low skilled workers to the UK economy, the government risks harming businesses and living standards now and in the future.”
Theresa May promised low-skilled migration would fall when the UK leaves the EU as a result.
The new system, based on recommendations from the Migration Advisory Committee (Mac) would aim to bring net migration down to below 100,000 – a target the government set years ago but is yet to meet.
The Institute of Directors said the government's net migration target was “counterproductive” and called for a more balanced policy.
Director general of the IoD, Stephen Martin, said: “The division between high and low-skilled misses an important point.
“Sectors like agriculture, retail, hospitality and construction rely heavily on so-called 'low-skilled' workers, in part because domestic workers want to work in other sectors, and in part because unemployment is at a record low.”
He added: “The UK needs a balanced migration policy which takes account of skills at all levels, a single-minded focus on reducing numbers would be cutting off our nose to spite our face.”
The British Chambers of Commerce director general Adam Marshall said businesses would have “mixed views” on the proposals, and said it was a “golden opportunity” to drop the migration targets.