Downing Street has moved to distance itself from a proposal by the immigration minister for a £1,000-a-year levy on every EU skilled worker recruited by British employers after Brexit.

Robert Goodwill told peers that the “immigration skills levy” could be introduced for EU migrants and would “be helpful to British workers who feel they are overlooked” in favour of migrants.

But the suggestion provoked an immediate business backlash which led Downing Street to try to play down the proposal. The prime minister’s spokesman said it was not on the government’s agenda and suggested Goodwill’s remarks had been “misinterpreted” and he had simply highlighted the skills levy for non-EU migrants coming into force in April.

A Home Office spokeswoman said after Goodwill had given evidence: “As the minister said, there are a whole range of options we could consider to control immigration once we leave the EU. The people of this country spoke very clearly in the referendum and we are not leaving the European Union only to give up control of immigration again.”

However the immigration minister’s evidence covering the skills levy and a possible resident labour market test indicates that the current thinking of Home Office ministers involves adopting much of the restrictions on non-EU skilled migrants on EU migrants.

Goodwill suggested that current restrictions on employers recruiting skilled labour from outside Europe, such as requiring them to try to recruit in Britain first for a specific length of time, would be applied to recruitment from the EU post-Brexit.

The immigration minister told peers that the Brexit result meant that voters had made clear that not enough was being done to ensure that “the skills are available from our own people” and companies were relying too much on migrants from outside Britain.



He said an apprenticeship levy was to be introduced later this year to pave the way for meeting the government’s commitment to training more than 3 million more apprentices before the 2020 general election.

“In April this year we are also bringing in the immigration skills charge for non-EEA skilled workers. If you want to recruit an Indian computer programmer on a four-year contract on top of the existing visa charges and the resident labour market test there will be a fee of £1,000 per year.



“So for a four-year contract that employer will need to pay a £4,000 immigration skills charge. That is something that currently applies to non-EU and it has been suggested to us that could be applied to EU.”

The immigration minister said he was not in a position to speculate on what the final immigration policy would be when the final settlement was reached but he invited the peers to seriously consider including the immigration skills charge for EU skilled migrants within their inquiry report.

“It would be helpful to the British economy and to British workers who feel they are overlooked because of other people coming into the country getting jobs they would themselves like to get,” he said.

On the other hand, the immigration minister also gave a strong indication that a seasonal agricultural workers scheme could be introduced after Brexit without counting towards the government’s net migration target, confirming recent hints from the environment secretary, Andrea Leadsom of a major loophole for the farming industry to escape migration restrictions.

Under the scheme, tens of thousands of people could work in Britain in low-skilled roles for less than six months.

Goodwill gave a clear hint that the government was likely to respond positively to a delegation from the National Farmers’ Union (NFU) just before Christmas, who pressed ministers to reintroduce the seasonal scheme to ensure access for the food and farming industry to short-term migrant labour.

The horticultural industry alone is estimated to need 90,000 seasonal workers by 2019, with 95% of British-grown berries picked by workers from other EU countries.

Goodwill told peers that the NFU had pressed for the scheme, which currently would allow British employers to recruit non-EU workers, to be reintroduced because of the weakness of sterling and because the post-Brexit vote had put some EU workers off coming to Britain.

“A seasonal agricultural workers scheme would not contribute to net migration because that only includes those who come to work for more than 12 months and they come for less than six months,” said Goodwill, who reaffirmed the government’s commitment to get net migration down below 100,000 post-Brexit.

The levy proposal provoked a critical reaction from business organisations. Séamus Nevin, head of employment and skills policy at the Institute of Directors, said it would hit businesses dependent on skills from abroad.

He said: “The UK needs these companies to do well if we are to make a success of Brexit. Businesses are already working with ministers to improve the homegrown skills supply, but this tax will only damage jobs growth at a time when many businesses are living with uncertainty.

“They simply cannot endure the double-whammy of more restriction and then, if they do succeed in finding the right candidate, the prospect of an extra charge.”

The London Chamber of Commerce said that with EU nationals accounting for 15% of the current UK workforce the levy would mean “effectively fining” a lot of firms. “Rather than making a populist pitch to an apparent concern of voters of leave voters, the minister should ask why EU nationals are here doing so many jobs?” said the chamber’s Sean McKee.

Don Foster, the Liberal Democrats’ business spokesman, also criticised the idea as “the most idiotic thing to come out of a minister’s mouth since ‘red white and blue Brexit’”, – a reference to comments made by Theresa May last month. “I’ve yet to meet a single business who would hire from abroad if they could find the skills they need here,” he said.

But the Labour MP Frank Field told the Financial Times he very much welcomed the move “if we used the money to train natives”.