May Warned of `Worst of All Worlds' in U.K. Migration Crackdown

(Bloomberg) -- The U.K. government risks producing the “worst of all worlds” if it tries to tailor post-Brexit immigration rules for specific industries, according to a study by a House of Lords panel.

Seeking to avoid labor shortages in key industries, Bloomberg reported last week that Prime Minister Theresa May is considering a sector-by-sector approach when deciding which EU nationals would qualify for work visas after Britain leaves the European Union.

Such an approach received short shrift in the report from a home affairs subcommittee of Parliament's upper house. Released on Monday, the peers warned a piecemeal system could “fail to deliver a meaningful reduction in immigration, while also proving more onerous and costly for employers, prospective applicants and those charged with enforcement.”

May's administration wants to cut annual net immigration from near-record levels of more than 300,000 at the time of last June's referendum to the target of the “tens of thousands” that her Conservative Party promised voters. The prime minister has interpreted the Brexit vote as a call to curtail free movement of labor from the EU.

As it seeks to control the number of workers from abroad, the government wants to balance the needs of businesses that have become dependent on foreign employees both for skilled work in places like hospitals and banks, and for jobs that Britons don't want on farms and restaurants.

The House of Lords committee said the assumption that British workers will fill the jobs vacated by EU migrants is “simply not there” and warned that restoring control of national borders may not prove enough to slow immigration or revive wages.

It recommended a new immigration system be phased in over time and urged the government to be wary of endangering the economy by cutting off access to foreign skills.

The Lords last week complicated May's Brexit planning by amending the government's withdrawal bill to guarantee the rights of EU citizens already in the U.K.

Monday's report said the government was right to pursue a “two-way agreement” in which European leaders safeguard the rights of U.K. nationals living in their countries.

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net.

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net, Steve Geimann, Brian Wingfield