Theresa May has infuriated cabinet colleagues and business leaders by insisting on a post-Brexit plan to slash EU migration, centred on tough visa restrictions on unskilled workers from the bloc.
Philip Hammond, the chancellor, and Greg Clark, business secretary, fought a rearguard action on Tuesday to dilute the long-delayed immigration white paper, which they fear could cause serious damage to the British economy.
But the prime minister sought to push through the plan even though her cabinet colleagues resisted. “They’re trying to bounce us,” said one person involved in the talks.
The battle between Mrs May, a longtime champion of curbs on immigration, and her business-oriented ministers will define Britain’s labour market for decades to come. The white paper — set to be published on Wednesday — will bring both EU migrants and those from the rest of the world under the same visa regime, starting in 2021.
Sajid Javid, the home secretary, confirmed that David Cameron’s objective of bringing net immigration below 100,000 a year had been dropped, saying “there is no specific target”.
He told the BBC on Wednesday morning that the government would consult on whether to set a minimum salary of £30,000 for migrants to enter the UK as “highly skilled” workers, as recommended by the government’s independent migration advisers earlier this year. “It’s equally important to listen to business and find the right threshold,” he told the BBC.
He said the threshold should be above the median national salary, although some professions could be exempted. For students who stayed on after their courses, the threshold “would be a lot lower”, said Mr Javid. “I think we should be more welcoming to students in this country.”
Mrs May’s intervention is a sign of her determination to end free movement of EU nationals after Brexit but will dismay business leaders who have warned that it will hit Britain’s already fragile economy.
The cabinet dispute centred on the proposed £30,000 minimum salary. While Mrs May wanted strict new limits on EU jobseekers, Mr Hammond and Mr Clark said it would weaken the economy, especially industries relying on a ready supply of young workers with sought-after skills who did not necessarily meet the salary threshold.
At the moment, 76 per cent of EU nationals working in Britain earn less than £30,000.
Publication of the white paper was held up while officials sought to include the £30,000 figure and also find a form of words that Mr Hammond and Mr Clark would be “comfortable” with. In a partial victory for Mr Hammond and Mr Clark, Downing Street agreed that the threshold be put out to consultation. Treasury insiders later said the department was “content” with the outcome.
Businesses have warned ministers that the future immigration regime for EU nationals is a critical element of post-Brexit policy since it will determine their ability to fill skills gaps and recruit competitively at a time of record employment and low productivity growth.
Adam Marshall, head of the British Chambers of Commerce, said Mrs May’s approach was causing “huge concern, from Inverness to Cornwall” and that her proposed £30,000 salary threshold for “skilled” migrants would affect many sectors.
“We have made representations over and over but there is a difference between them listening and them hearing,” he added.
Mrs May and Mr Javid have taken a hawkish line, arguing that EU migrants should be treated in the same way as skilled workers from outside the bloc who already face that salary threshold. But in a concession to employers, the new system will lift the cap on the number of visas issued to professionals such as doctors and engineers