Sadiq Khan has urged the government to drop its proposed £30,000 salary threshold for skilled immigrants, saying it will have a damaging effect on Britain’s post-Brexit economy.

The mayor of London urged the new Prime Minister, Boris Johnson, to “fully recognise the positive impact immigration and freedom of movement has had in London and the UK” and called for City Hall to be given the power to offer fast-track visas for those wishing to work in the capital.

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Khan said the minimum salary threshold should be lowered to £21,000 a year, the equivalent of the London living wage, for the Tier 2 “skilled worker” rather than the proposed £30,000.

The government’s white paper on post-Brexit immigration policy, released last year after a series of delays, quoted recommendations from its migration advisory committee that the salary threshold should be extended to £30,000 for EU nationals wishing to work in the UK after Brexit.

Currently, all non-EU nationals must earn at least £30,000 to apply for a high-skilled visa. The government white paper proposes extending this threshold for EU citizens once Britain leaves the bloc.

Khan said lowering the threshold to £21,000 would reduce by more than half the number of jobs held by EU nationals that would otherwise not qualify for the Tier 2 visa after Britain leaves the EU.

The sector that would stand to suffer the most is construction and building, which would see jobs fall from 24,900 to 11,800, according to City Hall research.

A number of ministers at the time of the white paper’s release, including former chancellor Philip Hammond and former business secretary Greg Clark, raised concerns that retaining the £30,000 threshold would impede the public sector’s ability to recruit staff after the UK leaves the EU and severely hinder the NHS.

The white paper said the government would “engage businesses and employers as to what salary threshold should be set”. A consultation on the salary proposals is currently underway.

Speaking at an event hosted by the London Chamber of Commerce and Industry (LCCI) this evening, Khan said: “If the government’s proposed immigration changes go ahead, then I’m fearful for the impact they’ll have on the fabric of our city.

“The impact on the construction sector would make the housing crisis worse. And the impact on public services, including our schools and the NHS, could have devastating consequences for years to come.

“The new Prime Minister should instead fully recognise the positive impact immigration and freedom of movement has had in London and the UK and immediately take steps to reform the immigration system in a way that enables us to unlock the potential of Londoners.”

He added: “If he is unable to do this, then he should let Londoners take back control and give City Hall the devolved powers that he previously called for as mayor.”

Khan called for City Hall to be given the powers to create its own shortage occupation list (SOL), which documents the occupations that are in high demand in the UK and for which there are not enough resident workers to fill vacancies.

City Hall said it would be able to fast track workers into industries where the reliance on overseas workers is the most acute more quickly if it was able to compile its own SOL.

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Peter Bishop, the LCCI’s interim chief executive, welcomed Khan’s proposals. “Migrants form the fabric of London’s businesses and communities and the capital is far more reliant upon foreign labour than any other region in the UK, ” he said.

“A proposal we have strongly pushed for is a dedicated shortage occupation list for the capital. It is great to see the mayor of London lending his support to this, and also to see him continuing to support the merits of immigration, including calling for a lowering of the £30,000 salary threshold proposed in the government’s immigration white paper.”