Firms will not face charge for hiring EU workers, insists Downing Street

Businesses will not face a charge for recruiting staff from the European Union post-Brexit, Downing Street has insisted after the immigration minister appeared to hint that a levy could be imposed.

EU rules on freedom of movement are seen as a crucial factor in the negotiations over the UK's departure from the bloc
EU rules on freedom of movement are seen as a crucial factor in the negotiations over the UK's departure from the bloc

Robert Goodwill raised the prospect of a system similar to a £1,000-per-employee annual levy that will be placed on firms hiring non-EU migrants later this year.

But Prime Minister Theresa May's official spokeswoman said that such a charge was "not on the agenda".

Mr Goodwill also suggested that a seasonal scheme for agricultural workers such as fruit pickers coming to Britain for short periods was being considered.

EU rules on freedom of movement are seen as a crucial factor in the negotiations over the UK's departure from the bloc, but the shape of any post-Brexit immigration system has yet to be outlined.

Mr Goodwill referred to an annual £1,000 charge on businesses for every skilled worker they employ from outside Europe, which will take effect in April.

For a four-year contract, for example, it would mean employers face a £4,000 fee.

Mr Goodwill told the Lords EU Home Affairs Sub-Committee: "That's something that currently applies to non-EU. That may be something that's been suggested to us that could apply to EU.

"But we are not in a position to really speculate as to what the settlement will be post-Brexit negotiations."

However, Mrs May's spokeswoman said the minister had not suggested the levy would be imposed.

"He seems to have been misinterpreted, and his comments taken out of context.

"What he said was there are a number of things that some people may suggest could be the way forward.

"At no point did he say it's on the agenda. And it is not on the Government's agenda," she told a regular Westminster briefing.

The prospect of a levy for hiring EU workers sparked an immediate backlash.

Seamus Nevin, head of employment and skills policy at the Institute of Directors, said employers accept that immigration policy will be changing but warned charging £1,000 for each EU worker would "hit businesses who are dependent on skills from abroad".

He added: "The UK needs these companies to do well if we are to make a success of Brexit."

Adam Marshall, d irector general of the British Chambers of Commerce, said companies in the UK already face a "plethora of upfront costs".

He said: " Implementing this measure would be harmful to individual firms and overall growth, as it would make the UK less attractive to both investment and talent."

Liberal Democrat business spokesman Don Foster said such a move "would kill off British businesses".

Ufi Ibrahim, of the British Hospitality Association, described the suggestion as "very worrying", warning that it would increase costs for hospitality and tourism businesses and lead to higher prices for consumers.

The Home Office minister also indicated that a route for seasonal agricultural workers was being weighed up.

Under a previous scheme, fruit and vegetable growers were allowed to employ Bulgarians and Romanians for up to six months at a time, with an annual quota of 21,250.

The programme closed when restrictions on migrants from the two countries were lifted at the start of 2014.

Such an approach, which could apply to either EU or non-EU migrants, would not contribute to net long-term migration numbers as they cover those coming to Britain for at least a year, Mr Goodwill said.

He told the committee a seasonal scheme has less impact on local communities because people stay for a short time, often in temporary accommodation.

Net long-term international migration from both the EU and the rest of the world has been running at near record-levels of more than a third of a million - well above the Government's target of less than 100,000.

A range of options for an immigration system have been proposed following the Brexit vote, including a work permits regime or a so-called "emergency brake" approach.

Mr Goodwill said a number of models are being explored but told peers it would be "pointless" to speculate ahead of the negotiations.

After the hearing, a Home Office spokeswoman said: "As the minister said, there are a whole range of options we could consider to control immigration once we leave the EU.

"The people of this country spoke very clearly in the referendum and we are not leaving the European Union only to give up control of immigration again."