The Home Secretary has asked the Migration Advisory Committee (MAC) to review future salary thresholds for the new immigration system which is due to come into force in January 2021.

As we mentioned in our blog post- The immigration white paper – what will it mean for the UK’s future immigration system? December 2018 – the Government’s proposals in its White Paper published in December 2018 are to adopt a new single skills-based immigration system.  The proposed route for skilled workers will follow the Tier 2 of the Points Based System which already exists, but will be extended to achieve the aim of maximising the economic benefits that migrants bring to the UK.

The White Paper followed many of the recommendations of the MAC and proposed some changes to the current system including: a removal of the cap on the number of workers (being 20,700 per year) who can enter under the Tier 2 route for high skilled workers; abolishing the Resident Labour Market Test (which required employers to advertise a job for four weeks and to consider applications from resident workers before allowing applications from migrants); and lowering the skills threshold for workers entering under the new skilled workers route to RQF 3 or above which includes A-level or advanced apprenticeship or Level 3 NVQs.

However, one suggestion by the MAC was to retain the minimum salary threshold of £30,000. In the White Paper the Government made it clear that they would engage with businesses and employers as to what salary thresholds should be set.  Businesses were certainly concerned that if the salary threshold remained the same, the effect of the other changes would not be recognised.  In fact, the Government itself acknowledges that 60% of existing jobs in the intermediate skills level would not meet this salary threshold and whether or not the salary threshold would be met would depend on the industry sector and the region in which the business operated.

The Government has therefore asked the MAC to:

  • Consider the mechanism for calculating future salary thresholds, such as whether this should be a single minimum salary threshold, potentially with some flexibilities to set a lower rate; the current arrangement of a combination of a minimum salary threshold and a “going rate”; or an approach which focuses only on the “going rate” for a particular role;
  • Review the levels of salary thresholds. This should include advice on the impact the salary thresholds will have on annual net migration, the resident workforce, migrant workers, employers, public finances and the economy;
  • Consider whether there should be regional salary thresholds. There have not been regional variations to date but the Government accepts that salaries vary throughout the UK. Therefore while coherence in an immigration system is required the MAC should consider whether there is a need for greater regional variation; and
  • Review the exceptions to the minimum salary requirements, which includes for example what impact salary thresholds might have on sectors that provide high public value to society and the economy but which might not pay such high wages or whether there should be exceptions to new entrants to an occupation.
  • The MAC is asked to report by January 2020 and any report, combined with the views of other stakeholders, will aim to ensure that the new immigration rules will reflect the requirements of businesses in the UK.