TechUK rails against “dumb” immigration policy

British start-ups would benefit from a "smart" immigration policy and remaining part of the EU, according to tech industry trade body techUK.

CEO Julian David urged the new Tory majority government to change its stance on immigration in an interview with IT Pro.

"The position on immigration needs to be smart and at the moment you could argue it's dumb," he said. "We're not talking about numbers here, we're talking about getting the right skills needed to grow the economy, be they plumbers or be they tech entrepreneurs or be they experienced large company people."

The technology industry is worth 100 billion to the economy, according to start-up quango Tech City UK, but companies are increasingly unable to find sufficient talent to fill vacancies.

A recent CompTIA survey showed 44 per cent of 1,500 IT workers believe staff productivity is suffering because of the skills gap, with another 26 per cent blaming it for a lack of innovation. A separate report by recruiter Robert Walters discovered 72 per cent of businesses are affected by a shortage of talent.

Measures to tackle this include the introduction of a new computing curriculum to schools, while the Conservatives have pledged to train 17,500 maths and physics teachers in the next five years.

But TechUK's David said immigration must be addressed if Britain's start-ups are to grow to anything like the size of Google or Facebook - a much-discussed goal of the UK start-up scene.

"We need people with experience of growing a company fast, people who know how to do this [which is] something that's lacking in the UK," he said. "It's a good argument for more flexible immigration to attract those skills that exist in the US, for instance - we could bring them in here."

The government's Migration Advisory Committee (MAC) recommended adding four IT job roles to the Shortage Occupation List in February. These were senior developers, product managers, network security specialists and data scientists, with MAC saying companies couldn't find the requisite staff from inside the UK or the EU.

The recommendations have been accepted by the Home Office.

The Home Office currently offers a variety of visas aimed at entrepreneurs, those with "exceptional talent" and graduate entrepreneurs. But immigrants can only stay a maximum five years on an entrepreneur visa and one year on a graduate entrepreneur visa exceptional talent visa holders may stay up to 10 years.

Additionally, entrepreneurs must have 50,000 in investment funding.

A Home Office spokesman defended the government's policies, and claimed sponsored visa applications for skilled workers rose 14 per cent last year.

Most of these were in information and communication, professional, scientific and technical activities, finance and insurance industries.

He added: "We want to make sure British citizens benefit first from the country's growing economy, but that we also attract the skilled migrants that are needed by our businesses.

"That is why the government recently accepted recommendations from the Migration Advisory Committee to add digital technology jobs to the shortage occupation list. Furthermore, leading individuals in the field can also apply via the Exceptional Talent route if they are endorsed by Tech City UK."

EU referendum and the Digital Single Market

David admitted that some of TechUK's 850 members are worried at the prospect of leaving the EU, with the Conservatives promising a referendum on membership by 2017. One member, BT, expressed its fears publicly CEO Gavin Patterson told the Financial Times an exit wouldn't bode well for its business.

However, David added: "We live in a democracy, it's up to the government and people to decide if they want a referendum so we're not arguing with that. If you take the position of the government, which is that they're looking for reform, then this could be a positive."

What is at risk, though, is the prospect of the Digital Single Market proposed by the EU, and the benefits to start-ups that comes with that. Such a market would put give the UK a market of 500 million people, surpassing the US's 320 million.

This could really help British start-ups to flourish and expand to become the next Google-sized firm, said David. "There's a 500 million-person market right on our doorstep which people don't take advantage of to grow," he said. "If you look at the impact of the US market on the ability and speed with which US companies can scale, it doesn't happen here because the single market doesn't actually operate at home yet."

Only seven per cent of SMBs in the EU actually trade across borders, according to the European Commission, which points out that there are 28 different sets of rules for companies across all member states.

The prospect of leaving the EU has already helped push one Brighton-based start-up to announce it's leaving the UK. Social network start-up Ind.ie co-founder Aral Balkan is French, and said an EU exit would mean he'd have to leave Britain; plus, his firm is concerned over the Snoopers' Charter.