Falling back to the Tier 2 visa system, in the event of Britain failing to secure a bilateral agreement with the EU on the movement of people, is likely to be a costly affair given that Tier 2 visa applicants are routinely oversubscribed and rejected due to caps on numbers.
On Monday, a report from TheCityUK stated, London’s standing as a global center in the world of finance is threatened by the country’s existing emigration system. As a result, the cost of hiring accountants, bankers, and lawyers from outside of Britain is likely to jump significantly.
According to Ernest & Young (EY), attracting and retaining the best people has become a top priority for Britain.
“Losing this could undermine Britain’s position as the world’s leading financial center,” said Miles Celic, TheCityUK’s CEO in a statement.
Britain’s financial sector was quick to remind the government that it indeed is Britain’s biggest economic sector and raises more than 70 billion pounds in taxes, annually.
The other sectors that are calling for unhindered access to international hires are health and agriculture.
Across Britain, 7.5% of banking and related professional staff are European citizens; 4.7% are from non-European countries and in London one in four staff in the financial sector are non-UK citizens.
Currently, asset managers, banks, insurers, lawyers and accountants can be hired across EU states without them needing visas; for citizens outside EU’s economic bloc, there is the “Tier 2” work visa system.
In the event fails to secure a bilateral agreement with the EU on the movement of people, many sectors will have to fall back on the Tier 2 system for all non-British hires.
Applications for many categories in Tier 2 visas are routinely oversubscribed and rejected due to caps on numbers, reads the report.
Significantly, the probable increase in visa applications, along with the planned hike in visa application fees, is likely to result in a 300% rise in the cost of hiring international staff, said the report.
“Simply applying the current immigration system for non-European citizens to European citizens after Brexit will not work,” said Celic.
Britain could mitigate many issues by adopting some of the report’s recommendations unilaterally.
The notables include making the Tier 2 system more “dynamic” by introducing a “shortage occupation list” that reflects actual shortages being faced, including digital and cyber security skills.
The also calls for a “new short-term immigration category to allow international staff to work in Britain for up to six months without needing to apply for a visa first, similar to a system already used in Canada”.
Already many large insurance companies and banks have shifted or are starting to shift some operations and staff to the EU in order to continue to serve EU customers once Britain departs from the EU after March 31, 2019.