The Migration Advisory Committee (MAC) published its widely anticipated report on 28 January 2020, setting out its recommendations for a new UK immigration system to be launched in time for the end of free movement of people on 31 December 2020. The Government will be considering the recommendations in the context of its Immigration Bill, expected to be published in March 2020. The main recommendations are set out below.

Possible role of a points based system

 

1. Skilled worker route for entry with a job offer. The current Tier 2 General category should be retained and apply to both EEA and non-EEA citizens as overall it appears that stakeholders consider that the ‘combination of skill eligibility and a salary threshold, works well for an employer driven system’. However:

  •  The MAC does not see the value in adopting an Australian model and recommends keeping the system simple, regarding the use of a small number of clear criteria as an advantage.
  • The current packaging as a points based system could change as points are not tradeable and applicants have to meet all criteria and there is no flexibility on how an applicant can qualify.
  • The route should be expanded to medium-skill jobs (RQF level 3 and above).
  • The Tier 2 (General) cap should be abolished.
  • The resident labour market test should also be abolished.
  • A simplified process should be introduced.

2. A work route for those without a job offer. If the Government wants to introduce a points based system, MAC recommends modifying (or replacing) the current Tier 1 (Exceptional Talent) route (which has been widely criticised as setting the bar to entry too high, resulting in very few applicants entering the UK under this visa type) into a more accessible points route for skilled workers who wish to enter the UK without a job offer. This would involve including an overall annual cap on those admitted and requiring those who wish to enter the UK under this route to submit an ‘Expression of Interest’ to create a pool of migrants to be selected for entry to the UK. Invitations to submit a full application could be on a monthly basis with a quota. The selection of those invited to apply would be based on those who have the highest number of points in the pool using a points based system (using characteristics the Government wants to attract including qualifications, age, studying in the UK and priority areas such as STEM and creative skills) and there should be an absolute minimum number of points. The focus should be on exceptional promise, not exceptional talent, recognising that in some cases promise does not deliver (the UK’s historic experience with the Highly Skilled Migrant Scheme and Tier 1 General suggesting that a sizable proportion of migrants entering the UK via those routes did not end up working in highly skilled jobs as was intended).

Separately, readers should note that on 30 January 2020, the Home Office rebranded Tier 1 (Exceptional Talent) to the Global Talent Category. Further details have now been published regarding the new visa system. This category will not be subject to a cap in numbers. Otherwise, the differences between the Exceptional and Global Talent routes seems limited, particularly so for those in the areas of digital technology, arts and culture.   For those applying in the fields of science and medicine, engineering and humanities, an additional accelerated route has been introduced, in addition to a quicker route to settlement after 3 years (instead of 5 years) with additional flexibility around absences from the UK for research purposes.

3. Settlement. MAC notes that Australia and other countries use a points based system for deciding who should be given settlement. It regards the current UK system as inflexible but feels that it cannot opine on whether it works well due to a lack of data. However, it recommends a review of the criteria for settlement be undertaken if better data is available and, if there are to be changes, a points based system is one option.

Appropriate level and design of salary thresholds in Tier 2 (General)

  1. Retention of salary thresholds. The report recommends that salary thresholds are retained, highlighting the importance of salary thresholds for 3 key reasons:
  • to prevent undercutting in the UK labour market;
  • helping the realisation of the UK as a high wage, high skill, and high productivity economy; and
  • improving the UK’s public finances.

Remember in this context that, unlike Australia, Canada and New Zealand, population growth is not a stated aim of the UK Government and salary thresholds would be expected to lead to lower migration.

2. Level of salary thresholds. The report recommends:

  • Retaining the current structure where the relevant threshold is the higher of a general salary threshold (currently £30,000 or £20,800 for new entrants) or an occupation specific salary threshold (based on the 25th percentile of full time annual earnings distribution each). To take into account the expansion of eligible jobs to medium skilled occupations, this would mean a reduction in the minimum salary threshold from £30,000 to £25,600.
  • A simplified way of calculating the new entrant rate of 70% of the experienced worker rate for both the general and occupation specific threshold, and a wider definition of new entrant should be used. This rate should be applicable for 5 years (including any time spent on the post study work route), not 3 years.
  • For most eligible occupations in the NHS and schools, MAC recommends the use of national pay scales as the relevant thresholds, recognising that salaries may not reflect the high public value of the work undertaken, ensuring they can hire migrants. If implemented, this will be a welcome move to employers in the health and education sectors, though the MAC does note concerns over it holding down public sector pay and resulting in lower pay for migrants in those sectors.
  • Salary thresholds should not be pro-rated for part-time workers (despite concerns that no doing to may disadvantage women), though there should be more options for existing visa holders swapping to part-time work when they become parents.
  • In respect of the Shortage Occupation List (SOL), salary thresholds should not be lower for occupations on the SOL for entry as MAC feels that this would have the effect of perpetuating the shortage. In addition, no SOL review will take place at this time for medium-skill jobs. The main current advantages of the SOL are removed by the abolition of the cap and resident labour market test. A review of the whether the SOL will be needed after the new immigration system is introduced (but not before), and if the conclusion is that the SOL is still needed, only then will there be a review of which occupations are on it.
  • Only salary on the main job should be used to determine whether the salary threshold is met as this is easiest to verify and least open to exploitation. Allowances, equity and employer pension contributions should not be included. However, the rules on Tier 2 (General) visa holders owning equity in the employer sponsoring them (currently capped at 10% of their sponsor’s value) should be reviewed as this can penalise certain industries, as well as start-ups.

3. Geographical variations. The MAC has not recommended that the general salary thresholds are varied based on regional/geographical location of the job role; a single salary threshold across the UK should remain. However it has suggested that there should be a separate visa pilot for ‘remote’ areas of the UK which caters for these areas’ specific needs rather than altering the whole UK system.

MAC regards issues with data as an on-going problem and makes recommendations to the Government to improve data availability and access, fearing that without it the UK will be unable to steer a steady path between an unduly open and an unduly closed migration policy. To this end, one of the main concerns held by the business community in the wake of Brexit and the end of free movement of people from the EEA to the UK, is the anticipated loss of a low skilled labour pool in the UK. The MAC advises that a points based route is not suitable for low skilled migration. If the lack of low skilled workers is a concern, the Government could address this through another route. For example, the temporary worker route enabling individuals deemed to be of low risk to come to the UK for up to a year without the need for a job offer, or via sector based schemes, as well as the graduate visa scheme; recognising however that this would reduce the likely overall benefits of moving to the new system. As the MAC notes, “there are trade-offs and no perfect system exists”. Of course, the Government is not obliged to accept the recommendations. We await with interest whether or not the Government decides to rely on the above recommendations when devising the UK’s new immigration system.