How UKIP's Stupid Immigration Policies Could Destroy the UK Tech Industry

By James O Malley on at

One of the most successful start-ups of the last few years has been the UK Independence Party. UKIP has been around for much longer, but it is only under the leadership of charismatic demagogue Nigel Farage that it has truly gone viral. The secret? Like other languishing small businesses, when Farage took charge he chose to pivot the product that UKIP was pushing. Rather than offer weird libertarian groans about Brussels technocrats, the last few years has instead seen UKIP focus on hyping up scary foreigners. And the pivot worked too.

Despite being almost an irrelevance at the last General Election, UKIP has consistently polled nationally between 12 and 15 per cent (and sometimes higher too). That’s more than the Liberal Democrats – and due to the unusual political circumstances we’re currently in, it is plausible that former city trader Farage’s so-called “People’s Army” could soon form part of a governing coalition.

One of the many things that are scary about this prospect is that it could be utterly disastrous for the UK’s vibrant technology industry.

Let’s start with what UKIP actually wants to do. In the party’s election manifesto it calls for a referendum on Britain’s membership of the European Union (which the party wants us to leave), as well as more migration controls that will limit the number of immigrants based upon “Britain’s economic and social needs”. Work visas for high-skilled workers would be capped at 50,000 a year; that includes people coming in from the EU, and low/unskilled people would be banned from working in Britain entirely. To manage the work visas that will be granted, there would be an Australian-style “points” system.

This is wildly different to how things are today. According to the Office of National Statistics, In 2014, Britain granted 167,202 work visas – and remember, because we’re currently a member of the EU this doesn’t include the additional quarter of a million people coming from 28 countries in Europe to work in Britain. The ONS also notes that just over 23,000 visas were in “Information and Communications”, and just over 10,000 were for “Professional, Scientific and Technical Activities”. In other words, we import a heck of a lot of coders, developers and designers.

If UKIP had its way, all of these people would be forced to compete for fewer places in the UK; this would no doubt be a big hit on the UK technology sector. Tech accounts for 8 per cent of the UK economy, and as noted by Alex Wood last year, 14.5 per cent of British companies are founded by entrepreneurs from abroad. Tech is also one of the fastest growing sectors of the economy, with 27 per cent of jobs growth in London coming from tech jobs. Apparently between 2009 and 2012, the number of tech companies in London grew 76 per cent to over 88,000 companies. If Britain is to maintain and grow this, then it needs skilled people who can work for these companies – and arbitrarily shutting them out could be catastrophic.

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Why UKIP's "British jobs for British" workers mantra is bull

The obvious counter to bringing people over to do tech jobs is why not employ British people to do them instead? While “British jobs for British workers” may sound attractive if you don’t think about it too hard, the reality is that coding apps, crunching data and designing databases is highly skilled work. While we could conceivably massively invest in education, this wouldn’t solve the problem of needing people now. And in any case, being able to work flexibly across borders is an integral part of participating in a global marketplace.

What’s particularly crazy about UKIP’s hard-line on immigration is that British business – and tech in particular – is already frustrated by Britain’s existing draconian rules on immigration. There are already problems and Nigel Farage would make things much worse.

In November last year entrepreneur Sherry Coutu, who has worked with Zoopla, LoveFilm, YPlan and a tonne of other British tech start-ups published The Scale Up Report, which was commissioned jointly by the government and the British technology industry. The independent report pointed at the difficulty faced by British companies is growing quickly: while we do have a successful ‘Silicon Roundabout’ (the name given to the cluster of tech companies based around London’s Old Street Tube station) we still haven’t managed to match Silicon Valley. Britain still hasn’t got a tech success story on the scale of Google, Facebook or Apple.

The “scale-up gap”, Coutu describes, is that British companies struggle to grow quickly from 10 to 100 employees, and then on to 500 and 1,000, and so on. Among the identified problems is that British companies have issues recruiting staff with the skills they need, building leadership capabilities, and accessing new customers in new markets.

One of the recommendations from the report is essentially the opposite of UKIP’s fortress mentality, arguing for the introduction of new visas to make it easier for British companies to hire from abroad. A “scale-up visa” should enable foreigners to start work in Britain in just two weeks, thus enabling companies to hire who they need to grow faster, and acquire the local knowledge of people from other countries in order to sell to them. In essence, it is an argument to make immigration easy, and less weighed down by bureaucracy.

By contrast, the current political mood in the country seems to be a desire to paint “GO AWAY” on the Cliffs of Dover and get to work on a time machine that will take us back to a romanticised false memory of the 1950s. (Just don’t point out we could probably invent that time machine quicker if we could bring in more physicists and engineers from abroad.)

Speaking to the Cambridge University elections podcast, Coutu reaffirmed the importance of immigration and visas, arguing that with the sort of highly skilled people that tech needs, speed is important: if someone talented abroad comes on to the job market, by the time British companies have finished faffing about with visas, chances are the individual will have been snapped up by a foreign company, which harms the competitiveness of British business.

Chris Measures, a consultant who works with Cambridge’s cluster of technology companies is also nervous about UKIP. In a blog post last year, he argued that in addition to education and skills there’s almost a philosophical need for immigration to bridge what he calls the “ideas gap”. This is a description for the perceived cultural differences between someone who was born in Britain and abroad. Not only do people from other countries bring different experiences and ideas with them, but there’s also the “entrepreneurial” and risk-taking spirit, but which isn’t ingrained in Britons like it is in places like the United States.

So ultimately, if UKIP did manage to implement any of its immigration policies, it could be disastrous news for the UK tech industry. And I’m saying this without even addressing the massive uncertainty that British business would face were we to pull out of the EU.

To end, there is good news: it is very unlikely that Nigel Farage will get a chance to implement his policies. As things currently stand, UKIP looks set to win somewhere between one and six seats on May 7th, and any coalition deal with the Conservatives would inevitably water down UKIP’s tough-sounding nonsense into something at least slightly more palatable. Though in a sense UKIP has already won: its success over the last few years has transformed the debate around immigration; so much so that the politicians from other parties have all been forced to act tough, even if ultimately it would serve the country better for them to have the balls to tell Farage and his supporters to get a grip.

Lead Image Credit: Liam Butler (@angryflatcap)