Innovate Finance Responds on Post-Brexit Migration09.18.2018
Today’s report from the Migration Advisory Committee (MAC) on EEA workers in the Labour Market represents an important assessment of the impact of migration across different industries. This non-partisan view of the economic impact of post-Brexit migration will help to instruct evidence-based decision-making, in what is often a highly charged area of policy.
— Innovate Finance (@InnFin) September 18, 2018
Whilst the MAC report draws out that EEA migrants have not had a significant economic impact on the wider UK economy (either positive or negative), when looking at the UK FinTech sector, a recent report by Innovate Finance suggests they have made a real and tangible difference.
The report on Supporting UK FinTech: Access to a Global Talent Pool, which we submitted to the MAC, revealed that 42% of the UK FinTech workforce is from overseas (of which 28% are from the EEA). Moreover, this overseas talent represents a complement to our domestic talent pool, as 47% of firms recruit from abroad due to a lack of applications or skills from the UK workforce. This is reiterated in the MAC report which suggests that “migrants might have skills that complement UK workers, or may encourage UK workers to acquire higher levels of human capital”.
A movement to a more restrictive immigration system may therefore limit the ability of FinTech firms to attract and retain the global talent they need to thrive. Indeed, our analysis suggested this could lead to a potential loss to UK FinTech of £361m.
We are therefore encouraged to see positive policy recommendations suggested in today’s report, which we believe may help to mitigate potentially negative impacts. These include (but are not limited to):
- Abolishing the cap on the number of migrants under Tier 2 (General).
- Considering the abolition of the Resident Labour Market Test.
- Reviewing how the current sponsor licensing system works for small and medium-sized businesses; and
- Consulting more systematically with users of the visa system to ensure it works as smoothly as possible.
- We are also encouraged by calls for the Shortage Occupation List to be open to a wider range of jobs, and for Tier 2 General visas to be extended to workers in medium-skilled jobs. This resonates with the experience of UK FinTechs, for whom recruitment challenges exist not just for highly-skilled workers, but also for those in operational roles.
Finally, the MAC report highlights “the role migrants have played in contributing to, or founding, fast-growing and highly innovative ‘start-ups’”. Innovate Finance’s own research suggests this is true for UK FinTech, where 54% of firms said EEA migrants were important to founding their business.
It is therefore vital to maintain the comparative advantage the UK has built in innovative areas of the economy, such as FinTech, so that we remain open to the brightest talent from around the world. We therefore call on the UK Government to equally ensure there is a sustainable post-study pathway towards employment, whilst focusing on the domestic digital skills agenda. These will be important first steps towards mitigating any potential talent squeeze following our withdrawal from the European Union.
Innovate Finance will continue to represent and advocate on behalf of our FinTech membership, to ensure that as the UK’s post-Brexit migration system evolves, it does so with flexibility and pragmatism.
Charlotte Crosswell CEO of Innovate Finance said:
“We are encouraged to see positive policy recommendations in today’s Migration Advisory Committee report. Innovate Finance believes it is vital to maintain the competitive advantage the UK has built in FinTech. As such, calls for abolishing the cap on Tier 2 general visas and reviewing how current sponsor licences work are welcome first steps. We now call on the UK Government to ensure that as the post-Brexit migration system evolves, it does so with flexibility and pragmatism.”
Miles Celic, Chief Executive Officer, TheCityUK, said,
“The Migration Advisory Committee is absolutely right to call for an end to the Tier 2 visa cap for skilled workers. This policy has proven needlessly restrictive and holds back growth and innovation across the economy, particularly in areas outside London.
“The UK’s ability to attract, retain and develop global and domestic talent has long been a competitive advantage. Ensuring this continues is vital for Britain to maintain its position as a world-leading international financial centre.
“Fundamental reform of the immigration system is needed. It must become more flexible, dynamic and responsive to skills shortages, particularly around increasingly important technical and digitals skills which are already in such short supply.”
Here are the core recommendations from the Migration Advisory Committee's 140 page #immigration report. Numbers 3, 4 and 7 are key for our industry – see @TheCityUK @EYnews report for details: https://t.co/9xexBOPiMV pic.twitter.com/foqUcxCLrf
— TheCityUK (@TheCityUK) September 18, 2018
TheCityUK and EY have published a detailed report, ‘The UK’s future immigration system and access to talent’, into how the immigration system can be reformed to keep Britain globally competitive beyond Brexit.
The Amsterdam-based clearing house is the first non-UK CCP to achieve permanent recognition.
Review of trading desks found that incoming banks did not yet retain full control of their balance sheets.
UK has a greater market share than pre-Brexit for on-venue execution of GBP interest rate swaps.
Recognition has been temporarily extended until 30 June 2025.
The trade repository has been providing UK services since the first business day after Brexit on 4 Jan 2021.