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Fears over future talent as level of EU migration begins to fall

24 Feb 2017 By Marianne Calnan

But number of Europeans seeking British citizenship hits new high

The number of migrants from the EU arriving in the UK for work has fallen for the first time in a decade, according to official figures from the Office for National Statistics (ONS), with the news fuelling fears that SMEs and blue-collar employers may be hit hard by talent shortages as Brexit approaches.

At the same time, however, the ONS’s Migration Statistics Quarterly Report revealed that the number of EU migrants applying for British citizenship more than doubled in the past year to reach almost 250,000.

The number of EU migrants arriving without a job offer decreased to around 180,000 in the year to September 2016, while 113,000 arrived with a job already arranged. Overall net migration for the year fell by 49,000 to reach 273,000.

Although the ONS said it did not think the net migration figures were “statistically significant”, they form part of a wider trend that could contribute to labour shortages in key sectors of the economy.

“It is likely to have a disproportionate impact on SMEs and low-skilled sectors such as retail and hospitality,” said Gerwyn Davies, CIPD labour market analyst, who added that the numbers were consistent with recent warnings from the CIPD of a Brexit talent crunch.

“The figures should sound another warning to employers to widen their recruitment channels and redouble their efforts to make jobs more attractive to applicants from under-utilised groups by offering flexible working options and clear progression routes,” said Davies.

The level of net migration by those from outside the EU dipped to 164,000 because of a significant decline in the number of foreign students coming to the UK. Migration from Romania and Bulgaria reached record levels, offsetting a decrease from other parts of eastern Europe.

Nicola White, head of international migration statistics at the ONS, said it was "too early" to say what effect the EU referendum has had on long-term migration trends.

However, the Institute of Directors echoed concerns over the implications for the labour market. “Free movement across the EU was clearly a major factor behind the Brexit vote, and businesses are well aware that changes to the immigration system are coming,” Seamus Nevin, its head of employment and skills, told the Financial Times. “However, if in the long term this means a reduction in the number of skilled immigrants and the range of candidates available to growing businesses, the country as a whole will suffer.”

Lord Green of Deddington, head of the Migration Watch think tank, said Britain needed to become self-sufficient in its supply of talent. He said: “I’m not suggesting ‘British jobs for British workers’ – what I am suggesting is that in reaching a new immigration regime with Europe, we set it up in a way as to minimise the flow of low-skilled EU migrants.”

Immigration statistics from the previous quarter revealed that the number of migrants in the labour market had reached an all-time high. But experts warned that was likely to represent a peak as Britain began to lose its attractiveness as a destination for migration.
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