This post is also available in: Japanese
The clampdown on non-EU immigration by the UK government has been causing plenty of concern amongst the Japanese business community for some time now. As we approach a general election in May 2015, the coalition government is under pressure to explain how it is going to meet its commitment to cut immigration to the UK to tens of thousands. The government can control non-EU immigration, but not the hundreds of thousands of immigrants who come from EU countries to the UK each year, because of the EU commitment to the principle of free movement of labour. This is why Japanese companies are finding it so hard to get visas for their Japanese expatriate staff.
If the UK tries to undermine this principle of the free movement of labour within Europe, the coalition government could even find themselves having to leave the EU, as Angela Merkel has stated. Pro Europeans and most businesspeople in the UK would rather further reforms were made to the EU, which address the causes of pan-European movements of people, but this would mean further harmonisation of business and labour regulations. Anti Europeans are antagonistic towards any imposition of unified regulations and the unions in countries such as France or Germany would resist any reforms which would threaten protection of employment of their members, or reduce state benefits.
For example, it is estimated there are over 300,000 French people living in London, making it the sixth biggest French city in terms of population. The usual explanation for this is that young people have found it hard to get a permanent job or start a business in France. There are more opportunities for them in the UK.
I’ve certainly found, as I have been expanding my business in France this year, that the bureaucracy and barriers to efficiency in France are quite bewildering compared to the UK. For example, in order to sell training courses to a French company, I have to hire an agent who is a registered company in France, and also is an approved training provider. This agent then has to provide all kinds of paperwork to the customer, so they can claim back from a state training fund the training taxes they have contributed. This adds considerable expense and delays to my business.
A Japanese company told me recently that when they tried to acquire a French software company that was about to go bankrupt, the employees decided they would prefer the company go bankrupt even though they would lose their jobs, because then they would have 80% of their salary, benefits and even mortgages paid for the next three years.
I can see that from the French perspective these regulations and taxes can be justified as ways of creating and retaining jobs and ensuring development of skills, but in reality all it has done is deter foreign companies from making any significant investments in France. So despite the visa difficulties, the UK is still the destination of choice in Europe, for businesses and people.
A 2017 update to this article appears here – A second look at France
This article was originally published in Japanese in the 10 December 2014 edition of the Teikoku Databank News. It also appears in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.
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