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Will Scrapping Skilled Migrants Cap Be Enough to Reduce Post-Brexit Shortages?

on Friday, 28 September 2018.

The Migration Advisory Committee (MAC) has published its highly anticipated report on how the UK's immigration system might be adjusted to counteract the effects of Brexit.

The study, which includes an examination of the impact of EEA immigration on the UK economy, recommends a number of reforms to the immigration system in the event free movement of EEA nationals is not included in any trade deal which the UK negotiates with the EU.

General Recommendations

Most of the MAC's recommendations centre around changes to the Tier 2 immigration categories, which are used for sponsoring skilled workers. General recommendations made by the MAC include the following:

  • The general principle behind migration policy should be to make it easier for higher-skilled workers to migrate to the UK than lower-skilled workers.

  • The government should review how the current sponsor licensing system works for small and medium-sized businesses. It should also monitor and evaluate the impact of migration policies, something which the government does precious little of presently.

  • Immigration routes for lower-skilled workers should not take the form of Sector-Based Schemes, with the potential exception of a Seasonal Agricultural Workers scheme (a trial of which was announced recently).

  • If a 'backstop' is considered necessary to fill low-skilled roles after Brexit, the Tier 5 (Youth Mobility Scheme) should be extended. The rules should be changed so that migrants in that category can switch to Tier 2 status from within the UK.

Responding to Skill Workers Shortage

In order to make up any shortfall of medium to high-skilled workers resulting from Brexit, the report recommends the following amendments to Tier 2:

  • Abolish the existing cap of 20,700 new Tier 2 (General) migrants per year.

  • Reduce the minimum skill level for Tier 2 (General) sponsorship from the current requirement of level 6 on the Regulated Qualifications Framework (RQF) to RQF level 3. While this would increase the number of occupations qualifying for Tier 2 sponsorship from 100 to 237, some sectors, such as catering and hospitality, would still be unable to fill many vacancies with Tier 2 sponsored workers.

  • Maintaining existing salary thresholds for all migrants in Tier 2 and reviewing the Immigration Skills Charge. This recommendation means that while many more jobs would be eligible for Tier 2 sponsorship, the £30,000 minimum salary that would apply to most roles and the £1,000 per year Skills Charge would price many employers out of Tier 2 sponsorship.

  • Consider the abolition of the Resident Labour Market Test, or if it is not abolished, to extend the numbers of migrants who are exempt by lowering the salary required for exemption (currently this exemption applies to annual salaries of £159,600; the MAC suggest reducing it to below £50,000)

Reactions to the Report

Immigration lawyers have criticised the MAC's report for focusing too much on Tier 2, arguing that Tier 2 is overly bureaucratic and not sufficiently flexible to address the several distinct migration issues resulting from Brexit. The MAC is also criticised for failing to make any recommendations regarding self-employed workers.

A further criticism is the unwillingness of the MAC to recommend regional variations in minimum salary levels, despite the overwhelming evidence of the higher salaries available to workers in London and the South East. This rejection by the MAC seems even more peculiar given their recommendation that the government "pay more attention to managing the consequences of migration at a local level".

The MAC's report was published at the same time as a study by the Open University which found that 61% of employers have been experiencing skills shortages since 2017, with 48% of senior business leaders expecting Brexit to have a detrimental effect on talent pools. Clearly, businesses have concerns about the government's ability to make appropriate changes to the immigration system to minimise the impact of Brexit on the availability of suitably skilled workers.

Will the Government Follow the MAC's Recommendations?

Leaks from the Cabinet following publication of the MAC's report suggest that the Cabinet have agreed to adopt most of the MAC's recommendations in full. However, further leaks suggest that they are also considering sector-based immigration schemes to ensure the shortages in particular sectors are minimised, in spite of the MAC's explicit recommendations against such a move. The government's official position is expected before the end of 2018, with the publication of its White Paper on post-Brexit immigration.

The focus of the MAC's report on relaxing the rules surrounding Tier 2 sponsorship is positive news for employers. However, the government will need to ensure it has sufficient capacity to deal with the inevitable increase in applications that will result from such changes.

For further information on immigration issues affecting employers, please contact Tom Brett Young in our Immigration Law team, on 0121 227 3759.