UK work permit limit 'could damage economy'

08 Aug 2012 | Posted by Carl Thomas

The British economy is being damaged by the limits imposed on access to UK work permits, it has been suggested.

UK Trade and Investment (UKTI) – a government body that seeks to attract foreign companies and investment – claimed that migration is by far the greatest concern of foreign companies standing in the way of them making a move to Britain and could stand in the way of valuable business deals.

In fact, a total of 50 per cent of potential investors cited concerns about immigration law as their greatest worry. This was significantly higher than personal and company taxation (cited by 13 per cent), red tape (ten per cent), skills (nine per cent) and planning rules (five per cent).

The UKTI's report was leaked to the Independent newspaper and clarified that potential employers are particularly worried about obtaining UK work permits and visas for workers from India. The need for a higher level of fluency in English was also flagged up as problematic.

The report read: "These 'front of mind' concerns are usually near-term and have the prospect of impacting adversely on companies' immediate business competitiveness and therefore the UK's ability to attract investment."

In addition to worrying about gaining work permits, the report found that potential investors and employers are also concerned about the rules regarding intra-company transfers (ICTs), which would allow them to bring their own employees from abroad.

Among the changes brought in by the current government are a higher salary threshold for ICT access and a five-year limit on staff who transfer within an international business. These kinds of restrictions could be a particular problem for businesses seeking to hire very skilled individuals in particularly niche areas.

The UKTI questioned the potential impact of such restrictions on the country's economic growth, suggesting that there could be some long-term issues: "The maintenance of an internationally competitive domestic business environment is fundamental to government being able to deliver the growth agenda.

"The ability of the UK to attract high value foreign direct investment is central to the ability for growth in the UK."

Carl Thomas, director of VisaLogic, added that there have indeed been some changes in the way in which foreign companies view doing business in the UK: "We have noticed that foreign companies are more apprehensive with investing in the UK due to the large cooling off periods for ICT applicants that are enforced by the UKBA."