London’s economy faces ‘recruitment crisis’ in Government’s migration rule change, says mayor

By Noah Vickers, Local Democracy Reporter

Sadiq Khan has warned that the Government’s changes to migration rules could cause a “full-blown recruitment crisis” in vital sectors of London’s economy.

The hospitality, arts, construction, health and social care sectors could all struggle to fill vacancies due to the Government’s plan to tighten migrant entry requirements, an analysis by City Hall has found.

The research found that those sectors collectively contribute approximately £75billion to London’s economy, representing more than 14 per cent of the city’s total output, and comprising nearly 20 per cent of the UK’s GDP.

Overall, there are more than one million jobs in these sectors in the capital, of which around 47 per cent are held by non-UK nationals.

The rule changes announced by Home Secretary James Cleverly would see the salary threshold for skilled migrants coming to the UK for work increased from £26,200 to £38,700.

The minimum income normally required to sponsor someone for a spouse/partner visa is also expected to rise from £18,600 to £38,700, and social care workers will no longer be allowed to bring parents and children on their visa.

Mr Cleverly said that with net UK migration last year at 745,000, he was taking “decisive action to halt the drastic rise in our work visa routes and crack down on those who seek to take advantage of our hospitality”.

But City Hall’s new report found that collectively, the Government’s changes are likely to impact at least 250,000 hospitality workers in London and worsen the industry’s chronic job shortages, including chefs and restaurant staff. Fifty-eight per cent of London’s hospitality workforce are non-UK citizens, the research points out.

The report also warns that there are almost 40,000 non-UK nationals working in London’s arts, entertainment and recreation sector – almost 40 per cent of the sector’s workforce. Many of them are said to earn far below the £38,700 revised threshold, though precise numbers are not given.

In the capital’s health and social care sector, non-UK workers account for more than two out of five jobs. The Government’s changes are expected to impact around 200,000 non-UK nationals working in the sector in London.

Similarly, in the city’s construction industry, non-UK nationals make up around 40 per cent of employees, with the rule changes estimated to impact approximately 60,000 workers accordingly.

The Mayor of London said the analysis “lays bare the devastating impact the Government’s misguided migration policies could have on sectors crucial to London and the UK’s economy”.

Mr Khan added: “One of the reasons that London is the greatest city in the world is the contribution of successive generations of immigrants working side by side with trained Brits.

“Migrants are absolutely integral to our economy and public services, whether running our care homes and our bars and restaurants, or helping power our world-leading arts and creative sector.

“It is vital that more is done to train up British workers with the right skills. But the Government needs to realise that these latest immigration policies will lead to a full-blown recruitment crisis.

“This will have severe consequences for public services and the economy, not just here in London but across the UK.”

A Government spokeswoman said: “We continue to face unprecedented levels of immigration since the pandemic, which is why the Prime Minister and Home Secretary have announced a plan to slash migration levels, curb abuse of the system and deliver the biggest ever reduction in net migration.

“The Home Secretary has committed to put estimates of the impact of these announcements in the House of Commons Library. This will be set out in due course and a Regulatory Impact Assessment will be developed.”

Pictured top: Mayor of London Sadiq Khan (Picture: PA)