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The City of London wants a new “digital skills visa” to shore up the UK’s position as a financial technology hub against a growing threat from rival cities.
The idea is one of several proposals made in a report by PwC for TheCityUK lobby group, which focuses on how the UK’s financial services sector can be competitive after Brexit.
The report says that younger people with vital digital skills should be allowed to move to the UK even if they do not have a job offer.
Britain has become a hotbed of “fintech” innovation and investment, but financiers fear this could be undermined if a recent focus on immigration prevents start-ups from hiring the best talent from around the world.
Mark Hoban, the former City minister who co-ordinated the report, said: “It is quite a clear concern in the fintech sector that quite a lot of founders have come from overseas and it is easier to hire people from abroad if you are an established fintech than if you are a start-up.”
His report painted a vision of how the financial services sector could generate economic benefits of £43bn — equal to an extra 2 per cent of gross domestic product — by 2025 if its set of 35 recommendations are adopted.
The proposals include regular discussions between financial services leaders and government ministries on ways to maintain the competitiveness of the City; an annual review of regulation to ensure it is fit for purpose; and “reform and modernise” the tax system to make it more stable and predictable.
But it is the idea of a digital skills visa that could attract much attention. UK employers across a range of sectors have voiced concerns about talent shortages post-Brexit, but some areas such as tech are likely to be hit harder than others once EU nationals come under a visa regime.
The current system of border controls for non-EU citizens demands that migrant jobseekers meet strict criteria on qualifications and are paid generous salaries.
As PwC points out, UK immigration policy has become more restrictive in the past couple of years, so the cost to employers of a five-year general visa has increased by 250 per cent and is now £7,000. The minimum salary threshold necessary for sponsorship has also increased by more than 40 per cent from £20,800 to £30,000 a year.
While it is not yet clear what the future regime for EU citizens will be, the current non-EU template — combined with long visa processing times — does not work well for small tech companies seeking to bring self-taught young workers into the country at short notice and on relatively low salaries.
The Home Office currently offers a designated “tech visa” to help combat this problem, but numbers are capped at 200 per year and demand far exceeds supply.
PwC has suggested that post-Brexit, the scheme should be extended and rebranded as a digital skills visa, which is not subject to salary thresholds and would enable applicants to work for more than one company or establish a start-up.
The visas would be overseen by a specialist body such as Tech City UK, which has the expertise to assess applications. One category would enable students who had studied the relevant subjects in Britain to stay on and explore job opportunities, while another targeted at 18- to 30-year-olds would function as a tech youth mobility programme.
A third would be open to a wider range of people who meet the digital skills criteria based on specific shortages identified by the sector.
Julia Onslow-Cole, head of immigration at PwC, said it was essential to have a visa system that was “flexible and responsive to rapid changes” if Britain is to retain its competitive edge in financial services.
“The UK’s fintech sector supports the financial industry’s evolution, enabling transformation through technology,” she said. “The existing immigration regime cannot keep up with the pace of change and does not routinely allow for those with non-traditional skills or roles to be accommodated.”