MAC publishes recommendations for future UK immigration system

On 28 January 2020, the Migration Advisory Committee (MAC) released its much-anticipated report, A Points-Based System and Salary Thresholds for Immigration.

The report is limited in scope, only covering the skilled worker route (currently Tier 2 General) and the work route for entry without a job offer (currently Tier 1 Exceptional Talent).

As a general comment, the MAC expects that, in comparison with the situation under free movement, the proposed new system will produce small changes on a macroeconomic level. There are likely reductions in immigration, the total UK population and GDP, with possible very slight increases in GDP per capita, productivity and public finances.

In what may prove controversial for the hospitality industry, the MAC has recommended that waiters and waitresses should not be eligible for sponsorship under the skilled worker route. It has however recommended widening the range of occupations eligible for sponsorship in the construction, childcare and teaching sectors.

The MAC also considers it imperative that the new system is be closely monitored, so that any required changes can be identified and made quickly.

The next step will be for the Government to respond to the MAC’s recommendations, which it is expected to do in March when its white paper on immigration is due to be released.

Recommendations for skilled workers with a job offer

In a bold rejection of the Johnson Government’s pledge to introduce an Australian points-based system, the MAC concludes that the current framework is the most user-friendly option for employers, relying on a combination of skill eligibility and a salary threshold rather than a range of ‘tradeable’ attributes.

The main recommendations in the report for skilled workers with a job offer include:

• Maintaining the existing structure of salary thresholds, where the higher of either a general or occupation-related threshold will apply – these should be based on the Annual Survey of Hours and Earnings (ASHE) and updated annually
• Reducing the general threshold from £30,000 to £25,600, to reflect the MAC’s previous recommendation that medium-skilled roles should be included in the new system
• Keeping the occupation-specific threshold at the 25^th percentile for each eligible occupation
• Expanding the definition of new entrants to include those who are working towards professional qualifications, and those who are moving directly into a postdoctoral role
• Allowing the new entrant definition to be available for five years (currently it is available for three years), with the five years including any time spent on the post-study work route
• Reducing threshold for new entrants to 70% of the general threshold, ie from £20,800 to £17,920
• Using national pay scales for 24 identified occupations in the NHS and schools (instead of using the general and occupation-related thresholds based on ASHE)
• Adding the following occupations to the list of RQF3+ occupations eligible for the route: Air-conditioning and refrigeration engineers; rail and rolling stock builders and repairers; skilled metal, electrical and electronic trades supervisors; carpenters and joiners; glaziers; window fabricators and fitters; plasterers; floorers and wall tilers; painters and decorators; construction and building trades supervisors; childminders and related occupations; teaching assistants and educational support assistants
• Removing the following occupations from the list of RQF3+ occupations eligible for the route: Fishing and other elementary agriculture occupations n.e.c; waiters and waitresses
• Not pro-rating salary thresholds for part-time work, but considering what options could be offered for existing migrants who wish to work part-time after becoming a parent and publishing regular visa statistics disaggregated by gender
• Only allowing salary from the migrant’s main job to count towards meeting the salary thresholds, on the basis that counting other forms of compensation (such as pensions, shareholding etc) would create excess complexity from an enforcement perspective
• Reviewing the current restriction on skilled workers owning shares in their sponsor
• Not introducing regionalised salary thresholds in the main skilled worker route, instead giving consideration to introducing separate visas for regional workers, initially on a pilot basis with a full evaluation
• Reviewing the general and occupation-specific salary thresholds annually based on data rather than a percentage increase from the previous year’s levels
• Reviewing what role, if any, the Shortage Occupation List (SOL) should have. This should be done once the new system has been operating for a period of time, and noting that if the cap on skilled workers and resident labour market test are removed as previously recommended, the main benefits of the SOL will no longer exist
• Not seeking to assess which medium-skilled occupations should be included on a SOL, on the basis that occupations that are historically or currently in shortage may not be an accurate guide to the position once the post-Brexit immigration system is introduced
• Not using the SOL as a means of allowing lower salary thresholds than otherwise recommended, as this would remove the pressure for employers to increase wages or improve conditions, both of which could act to relieve the shortage of workers willing to work in the included occupations
• Considering addressing shortages in low-skilled occupations either through a temporary worker route (NB the Government has signalled in the press this week that it does not plan to pursue this option), or through specific sector-based schemes

For settlement in the skilled worker route, the MAC recommends:

• Pausing the increases in the salary thresholds required for settlement – the MAC suggests this would reduce the likelihood of ‘churn’ (where migrants are replaced by employers after five years, especially in sectors where pay progression is limited), and to guard against limiting integration for migrants who have less likelihood of expecting to be able to settle for salary reasons
• Reviewing the criteria for settlement, after first putting in place a means of obtaining data that would enable the performance of the current system to be evaluated
• Until the above review has been completed, continuing to exempt workers from the salary threshold for settlement where their occupation has been on the SOL at any time during the six years leading to settlement

Recommendations for workers without a job offer

The MAC sees the current Tier 1 Exceptional Talent route as requiring reform because it is undersubscribed and the skill level required for participation is too high.

It believes this route could sensibly have points-based criteria applied to it, and notes this would be in line with the practice of comparator countries, in which points-based schemes are normally geared towards the highly skilled. The MAC does however warn against repeating the mistakes of the previous PBS, which led to there being a large pool of individuals carrying out unskilled rather than highly skilled work in the UK.

The Government has already announced a re-branding and expansion of this route to become the Global Talent visa, which will come into effect on 20 February. It will now be a matter of waiting to see whether the Government will choose to apply some or all of the MAC’s recommendations to the Global Talent visa.

The main recommendations for workers without a job offer include:

• Having an expression of interest and monthly invitation to apply as the initial stage in the process – there should be a cap on invitations
• Using tradeable points criteria, incorporating additional points for migrants the Government wishes to attract, eg. Age; Qualifications, perhaps with extra points for STEM or other targeted qualifications; Previous UK studies; Priority attributes such as creative skills; Other criteria such as those to encourage applicants with desirable skills in areas where a job offer might be difficult to secure
• Focusing on high potential rather than established exceptional talent, while being aware that this may lead to visas being granted to migrants who fail to reach that potential
• Having a cap on the overall number of visas issued
• Running large-scale cohort studies to review and refine the selection criteria

The future role of the MAC under the post-Brexit immigration system

The MAC has also responded to the Government’s request for comment on the enhanced role it has proposed for the MAC, including what the scope and timing of its first annual report should be, and whether there should be changes to the composition of the MAC in the future. The MAC stated:

• It would like to establish a strategic analytical programme to address evidence gaps in existing migration-related data and research, and to enable it to evaluate the effects of migration policy
• It needs better access to existing data held by Government departments, which could be addressed through the Home Office retaining historical data in a format suitable for statistical analysis, as well as the Government linking relevant datasets and making them available to the MAC
• Its annual reports will review the effectiveness of immigration policies and assess their impacts on an ongoing basis, including making further recommendations based on these assessments
• It is an independent, expert advisory body that uses widespread stakeholder engagement to gather evidence, alongside statistical evidence and academic research, to inform its recommendations to government, and that this composition is fit for purpose
• It intends to engage with stakeholders and employers on a more routine basis and outside the scope of specific commissions, as part of its enhanced role
• The MACs current resources and funding constrains it from undertaking its enhanced role, which will comprise further commissions as well as proactive analysis, evaluation, routine stakeholder engagement and a more detailed annual report

This report is also the last MAC report to be submitted with Professor Alan Manning as its Chair. The Government is currently recruiting for a new Chair. This, aside from anything else, will no doubt have a significant influence on the direction the MAC takes as it embarks on its enhanced role.

It is clear that this year will be one in which employers and other stakeholders will need to keep up to date on the features and roll-out of the post-Brexit immigration system. We will continue to provide updates as and when they happen. If you need more detailed information or advice, please get in touch with a member of the immigration team or your usual contact, or visit our Immigration Solutions for HR page, where we offer a range of toolkits, training and onsite support for businesses.