Businesses warn UK over freedom of movement as Brexit talks begin - think tanks

LONDON (Reuters) - Britain should ensure that employers retain access to both skilled and unskilled workers from the European Union as it begins talks to leave the bloc or there is a risk of damaging UK businesses, a research report by two think tanks said on Monday.

With Britain's negotiations on the terms of its departure from the EU set to begin on Monday, the country risks skills shortages and losing business if it ends freedom of movement without a new plan for attracting workers, the report by the National Institute of Economic and Social Research and the Chartered Institute of Personnel and Development said.

"If the Government does not provide a user-friendly, flexible and affordable immigration system for EU nationals post Brexit... significant numbers of employers will be forced to relocate or focus future growth outside the UK," said Gerwyn Davies, CIPD labour market adviser.

"With the Brexit negotiations starting this week, there is still little clarity on the immigration system that the UK will adopt after Brexit."

The report found that a quarter of organisations would be negatively impacted by a restriction on EU migrants to only those who have job offers.

And one in five businesses said that they would target future growth outside the UK or even relocate as a result of the Brexit vote.

British Prime Minister Theresa May has said that the vote one year ago was partly a vote for Britain to control its borders, and has said that Britain will leave Europe's single market, as membership is incompatible with restricting immigration.

However the report warned against the government targeting an arbitrary limit of the absolute numbers of migration, such as a pledge to bring immigration into the tens of thousands.

"An overly blinkered approach focused on simply cutting immigration to tens of thousands and focusing only on high skilled employees could leave employers high and dry, especially those who rely on EU migrants to fill low-skilled jobs," Davies said.

(Reporting by Alistair Smout; Editing by Stephen Powell)