In a latest Brexit negotiating spin-off, the Centre for Social Justice (CSJ) has urged Home Secretary Priti Patel to raise the proposed minimum salary thresholds from £30,000 to £36,700 in a bid to secure jobs for low skilled UK-born employees. CSJ is an independent think-tank co-founded by Conservative MP Iain Duncan Smith.
However, experts across businesses are concerned about the adverse effect this proposal can have on their firms and challenges it can pose to the overall economy's growth.
“We have been trying to save the 'British curry industry' which is operating under immense pressure owing to staff shortages.
“The current requirements which mandate an employer to provide a minimum salary of £30,000 to secure a visa for a chef from South Asia, has shaken up the curry industry. Over 100,000 people are working in this industry and approximately 6-7% of these workers are from Europe. Mr. Duncan's recent proposal can negatively impact a lot of these curry houses who may have to shut down under such high thresholds,” said Oli Khan FRSA, Senior Vice President of Bangladesh Caterers Association.
The BCA represents 12,000 British Bangladeshi restaurants and takeaways across the UK making for a £4bn industry. But it is not just the curry houses who will remain at stake if the proposal was approved by the Home Office. The report has urged that the Home Office “consider constructing a list” of jobs which are strategically important to the UK. These sectors including the NHS should be exempt from the threshold.
However, a coalition of British Retail Consortium, London First, Universities UK, and UK Hospitality among others have warned that more than 60% of all jobs in the UK were currently beneath the £30,000 cut-off. Professionals across the south Asian diaspora are also concerned about dampened prospects of attracting inward investment into cities such as Manchester, and Birmingham. Some believe that any potential increment around salary thresholds will also adversely affect investments from non-EU countries like India.
“This is a very sensitive issue and will need to be managed carefully given there are new Governments which have taken charge from both the sides [Indian and the UK] and are pro-investment.
“There are two interesting dimensions to this increment, the first is to address the issue of up-skilling the local resources available and hence enable the companies to recruit more locally. An up-skilling programme will automatically have a strong effect from creating a skilled population and workforce locally.
The other perspective is to have regional thresholds which will take into consideration the local economic factors, standard of living and hence the figure can be balanced. This will definitely allow companies to look beyond the capital region and invest into cities like Manchester where the threshold compared to London can be much lower,” said Ghanshyam Nabar, a professional from Manchester.
According to the report the significant increase in low-skilled immigration has led to downward pressure on wages for UK-born workers at the bottom of the income spectrum as well as arguably reduced social mobility.
“I feel the limit of £36,000 may be detrimental to many businesses in the hospitality industry in view of Brexit. The staff's income is usually supplemented by the tips and gratuities that they receive. So, this threshold may prohibit businesses from recruitment of staff and I will never like to fix salary thresholds and rather work along market rates,” said Dr. Rami Ranger CBE, Founder of Sun Mark Ltd.
In the meantime, Mayor Sadiq Khan has also criticised government plans for a salary threshold, which will potentially damage London’s economy.
“Far from raising the minimum salary threshold, the Mayor believes the government should instead be lowering it to £21,000 and welcoming the skilled migration that London, and the rest of the country, will desperately need post-Brexit,” a spokesperson for Khan said to City A.M.
Income thresholds currently only apply to migrants from outside the EU, but are set to be extended to EU workers after Brexit.