LONDON — Japanese firms are threatening to review future plans to invest in Britain if the new government follows through with its proposal to put an annual cap on immigration levels.
Corporate executives have told ministers that moves to limit the number of skilled people from outside the European Union who can be employed in Britain will seriously harm their businesses.
Japanese firms are particularly concerned about plans to curb the number of senior staff who can engage in short-term intracorporate transfers, as well as limits on recruiting skilled staff from outside the EU.
Britain’s new center-right government has decided to cap immigration due to growing concern that non-EU citizens are taking jobs away from the British.
In July, an interim cap was imposed on skilled workers, but ICTs are currently exempted. But a new cap will be introduced in April, and ministers are consulting on how big it should be and which sectors should be covered, including possibly ICTs.
Critics say Indian ICTs to Britain have been conducted in order to acquaint staff with information technology functions so the work can later be sent overseas. They also claim there are plenty of unemployed British IT workers who could perform the jobs.
The government is aiming to bring immigration down to “tens of thousands” each year compared with hundreds of thousands under the previous government.
Japanese firms say it is unfortunate that a new system designed to crack down on abuses might hamper those who have always followed the rules.
“The JCCI has communicated to U.K. ministers and officials in September its strong concerns about the introduction of further limits on non-EU immigration and the possible impact on the existing operations and future investment of Japanese companies in the U.K.,” said Patrick Macartney, manager at the Japanese Chamber of Commerce and Industry.
The local Japanese automakers, which regularly transfer high-tech engineers from Japan to Britain, have been lobbying hard to get ICTs exempted from the proposed cap. The urgency is underlined by the fact that both Nissan Motor Co. and Toyota Motor Corp. have just announced major new investments in environment-friendly cars.
But the newly imposed cap on skilled workers is already impacting Japanese firms in Britain.
Katsuji Jibiki, a human-resources manager at Mitsubishi Electric Europe, revealed at a recent business seminar that his firm has been denied work permits to recruit about 30 engineers from outside the European Union.
He said, “These days we have big difficulties with work permits. Every year the government changes the policy and it is a big headache for us.”
Jibiki added that if the problems persist “there is a possibility of transferring our regional headquarters from the U.K. to continental Europe. We are thinking about such contingency plans.”
Speaking at the same event, Stephen Gomersall, the European chief executive of Hitachi Ltd. said, “There’s a danger that immigration legislation which is justified on totally different grounds can have operational consequences for sophisticated Japanese manufacturers.”
The British Parliament’s Home Affairs Committee has studied the idea of a cap and taken evidence from professor David Metcalf, chairman of the Migration Advisory Committee, the government’s independent adviser on migration issues.
He told members about an encounter with Japanese executives “hostile” to the cap. They told him, “We provide huge foreign direct investments into the U.K. Are you saying that it may be difficult for us to get our people in?”
The committee has warned that if the cap is set too high it could have a negative effect on business. Members recommend ICTs to Britain lasting under two years should be exempted.
The government says it is listening to the concerns of the business community and recognizes the need to administer the cap flexibly.
Some analysts have speculated that the government could exempt certain sectors from the cap.
Firms are currently allowed to recruit skilled workers from outside the European Union if they are unable to fill posts with the local population or the job is on a list of “shortage occupations.”
Due to concern over immigration levels, Britain has already curbed the number of unskilled workers it accepts and placed tougher restrictions on student visas.