The recent report from the Migration Advisory Committee is the most comprehensive analysis of immigration in the UK. The report solely focuses on migrants entering the UK through the ‘work’ route rather than the ‘study’ or ‘family’ route. In the analysis of the report it finds that European migrants pay £5bn a year more in taxes than they receive from benefits and public services, there is little evidence of EEA migrants limiting employment opportunities for UK-born workers and no evidence EEA migration has reduced wages for UK-born workers. The report gives their recommendations of a proposed immigration policy for post-Brexit Britain and this has proved controversial and unpopular for employers in many sectors. We briefly outline the main findings of the report that would affect employers if the recommendations became the UK’s immigration policy. This is not a full detailed analysis of the report and the document can be found in full on the link provided below.
- Report recommendations
- EU Citizens to lose priority status
The conclusion of the Migration Advisory Committee found no compelling reason to offer a different set of rules to EEA and non-EEA citizens unless the UK wishes to use migration in negotiations with the European Union. The committee determines that a migrant’s economic impact depends on factors such as skills, employment, age and use of public services and not fundamentally on their nationality. Instead, the cap on migrants will be abolished under the current Tier 2 system.
- Minimum salary threshold of £30,000
There is a proposal for a minimum salary threshold of £30,000 a year (which currently applies to non-EU migrants) to be extended to EU migrants, which is higher than the estimate of median household disposable income in the UK (£27,200). The drive behind this is a focus on providing greater access for high-skilled migrants whilst restricting lower-skilled migrants. It is the committee’s view that there will be enough lower skilled migrants entering the UK through the ‘family route’, the Youth Mobility Scheme and the Seasonal Agricultural Workers Scheme to fill vacancies that pay less than £30,000 per year. This is particularly controversial for companies who employ foreign workers for jobs that pay beneath the threshold.
- Immigration charge
The report recommends extending the Immigration Skills Charge of £1000 per year to EEA migrants per visa applied for paid by a medium to large sponsor. This is to be introduced as a flat rate so it is lower in percentage terms for higher skilled migrants. The report believes that this will have positive fiscal benefits, but may deter some employers from hiring higher skilled workers.
- Resident Labour Market Test
Employers currently have to advertise the job offering if it is not on the shortage occupational list, to ensure that there is no settled worker that could fill the vacancy. This involves advertising a vacancy for at least 28 days. The report recommends this to be abolished or to extend the numbers of migrants who are exempt through lowering the salary required for exemption.
- Restriction on Labour Market Competition
Currently EEA migrants are free to change employers without restrictions, unlike the current Tier 2 system which only allows migrant workers to change employers for better wages or work conditions. The committee proposes to let these restrictions apply to EEA migrants but also highlights the importance that this does not have the unintended consequence of holding down wages. They propose for routine monitoring of the use of the system in order to detect concerns as they arise.
- Expanding the range of jobs available on Shortage Occupational Lists
An occupation is place on the list if it is sufficiently skilled, there is a shortage and it is sensible to think that this shortage could only be resolved in a reasonable period of time through immigration. Occupations must meet the Tier 2 salary threshold.
- Seasonal Agricultural Workers Scheme
The report determines that approximately 99% of seasonal agricultural workers are from EU countries. The report recommends a Seasonal Agricultural Workers Scheme and recommends that a higher minimum wage be given to workers for privileged access to migrant labour. This scheme is detailed further in a recent article on this topic by our Immigration department.
- Tier 5 Youth Mobility Scheme
This is an existing cultural exchange scheme for people aged 18 – 30 from the following countries: Australia, New Zealand, Canada, Japan, Monaco, Taiwan, South Korea and Hong Kong (please note individuals from South Korea or Hong Kong require sponsorship). Individuals can stay in the UK for up to two years, they can work and study but are not allowed to bring dependents. The scheme operates on a reciprocal basis. The report finds that if low skilled workers are required, this scheme could provide some workers to fill these gaps. In practice this scheme already exists and is unlikely to be sufficient enough to replace the EU workers needed for certain sectors. The scheme usually attracts a certain type of person who is able to fund their own travels and with this financial independence it is unlikely they will be inclined to fill the lower-skilled jobs.
- In conclusion
The Institute for Public Policy Research stated that under the regime advocated by the Migration Advisory Committee Report, three quarters of European Union workers currently in the UK would have been ineligible to come and work in Britain. They further predicted that a staggering 95% of the current EU workforce in the transport and storage sectors would be ineligible to come here. This is a vast number of vital workers that currently support these sectors and employers in these sectors are deeply concerned over proposals and how they will staff their operations in the future.
The committee has concluded that despite the scale of migration from EU countries, the overall economic impact has been small. It has not harmed the resident population overall but has not had the significant benefits claimed.
Despite the report not being law, this does give employers an indication of the challenges engaging foreign workers after the UK has left the European Union if no deal is reached. This report sets a tone of the intentions of the Government and we could see significant labour shortages if these proposals are enshrined in to law, particularly for lower-skilled jobs that pay under £30,000 a year. This is concerning employers in all sectors. The committee has openly said that ministers could develop an alternative immigration policy with the EU, which would be linked to a trade package as part of the exit negotiations. March will determine which route the government will decide in relation to an immigration policy. In the event of a no deal Brexit, these proposals may well determine the future of Britain’s workforce.