SCOTTISH business groups have warned the proposed the new UK immigration rules would pose major challenges for firms north of the border.

Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said the plans would also require “continuous review” to address critical labour shortages.

She said: “Companies need to secure talent which is both domestic and international.

“The expansion of the seasonal workers scheme is clear recognition of the important economic contributions the agriculture sector makes to Scotland. However, the proposed salary threshold does not go far enough to support specific sectors in Scotland – the UK Government needs to set out how they will support these companies to recruit and grow. Businesses will be taking a close watching brief to determine whether this expansion will effectively service the whole of the United Kingdom.

“The proposals will present major challenges for key sectors, such as hospitality, care and tourism to be able to recruit and we urge the UK Government to ensure all workable options are in the mix including proposals from the Scottish Government and other partner agencies.

“The UK Government needs to continue the dialogue further with businesses to ensure immigration and skills policies work for business and the economy.’’

Andrew McRae of Federation of Small Businesses in Scotland, said only 5 per cent of Scottish small businesses currently engaged with the immigration system, so employers were understandably concerned about the added burdens.

He said: “The system is notoriously complex and costly and few small businesses will be able to absorb high administration costs – or have the resources to prepare for new rules in ten months’ time.

“For well-known sectoral and demographic reasons, Scotland’s small employers have a greater reliance on EU workers than the UK average.

“These staff are central to the success of many businesses in Scotland and therefore it’s crucial that employers encourage them to apply to the EU Settlement Scheme.

“Small businesses need a system that reflects Scotland’s needs without tying them up in red tape. We believe this can be incorporated within a new immigration system if the political will exists. We’re ready to discuss the details in the weeks and months ahead with all concerned parties.”