Costs for hiring bankers, accountants and lawyers from outside Britain will soar after Brexit and threaten London’s standing as a global financial centre unless the immigration system is urgently reformed, a report said on Monday.
The report from TheCityUK, which promotes Britain as a financial centre, and consultancy EY, said that attracting and retaining the best people is a top priority.
“Losing this could undermine Britain’s position as the world’s leading financial centre,” TheCityUK’s Chief Executive, Miles Celic, said in a statement.
The financial sector is quick to remind the government that it is Britain’s biggest economic sector, raising more than 70 billion pounds annually in taxes.
But other sectors like health and agriculture are also calling for unhindered access to international hires after Brexit.
Across Britain, 7.5% of banking and related professional staff are European citizens and 4.7% are from non-European countries, rising to 16.9% and 11.4%, respectively, in London where one in four staff in the sector are non-UK citizens.
Banks, insurers, asset managers, and the lawyers and accountants that support them, can currently hire from across EU states without visas but must use the “Tier 2” work visa system for citizens from outside the bloc.
If Britain fails to secure a bilateral agreement with the EU on the movement of people, the sector will have to use the Tier 2 system for all non-British hires.
Applications for certain categories of Tier 2 visas are routinely oversubscribed and rejected due to caps on numbers, the report said.
The resulting increase in visa applications, combined with planned hikes in visa application fees, would result in a 300% rise in costs for hiring international staff, the report said.
“Simply applying the current immigration system for non-European citizens to European citizens after Brexit will not work,” Celic said.
Britain could adopt some of the report’s recommendations unilaterally.
It calls for the British government to make the Tier 2 system more “dynamic” by introducing a “shortage occupation list” that reflects actual shortages being faced, including digital and cybersecurity skills.
As reported by Reuters, the report 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.
Banks and insurers are already starting to shift some staff and operations to the EU to be guaranteed of serving customer there after Britain’s departure from the EU next March.