Member News
23rd November 2010
Ahead of the home secretary's announcement on the immigration cap, the Forum of Private Business demonstrate the impact this will have on SMEs.
In the first Prime Minister's questions of November 2010, David Cameron made the surprise announcement that intra-company transfers will be exempt from the government's immigration cap, which will enable businesses to transfer thousands of non-EU workers to UK offices. This decision represents a victory for business secretary Vince Cable, who has been pushing for greater flexibility of the immigration cap rules. While the politics of this situation may be interesting - Cameron trying to balance the demands of Tory backbenchers with Liberal Democrat MPs who are keen to stamp as much of their authority on government policy as possible – it has serious consequences for small firms.
This exemption will create an immigration loophole that will benefit large firms and will therefore put small and medium-sized enterprises (SMEs) at a competitive disadvantage. Some SMEs operate in sectors where a highly specialised workforce is required and they often find it difficult to recruit employees with the necessary skills from within the UK. As the majority do not have offices overseas, they will be unable to use this exemption to bring in skilled non–EU workers and their businesses will suffer as a result. This decision highlights that while the government is very vocal in its support of SMEs, some of their policies favour large multi-nationals rather than small firms.
The immigration loophole not only raises questions about government support for SMEs, it illustrates the problems with training and skills. In December 2009, the Forum's Referendum ballot found only one per cent of respondents believe the skills of their local workforce are 'excellent' and only 25 per cent described them as 'good'. The current workforce does not include people with the right skills needed to supply sectors such as science and engineering. These businesses are particularly important to the future of the economy, especially when it comes to developing green technologies and industry.
Last week, the government published its paper on training and skills. While it makes some very encouraging points, it must go further if it wants to ensure that the gap between the skills of the workforce and the skills required by private firms is addressed. If this gap is bridged, businesses, large and small alike, will not need to recruit workers from outside the UK. Until this is achieved, however, the government must rethink its policy on immigration and ensure that SMEs in highly skilled sectors are able to compete on a level playing field with large multinationals.
Have your say...
Please enter your comments below.