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The MAC report: EU nationals will need work permits if they want to get jobs in the UK post Brexit

18 September 2018

The Migration Advisory Committee has released today its long awaited report into the impact of EEA migration in the UK. The report is a key indicator of what the Government may do when they reveal their plans for the new immigration system which will govern how EU nationals are able to live and work in the UK after the Brexit transition period ends on 31 December 2020.

On a positive note, the conclusions of the report finally put to rest the fear that EU migration has had a detrimental impact on the UK. The MAC is clear that there is little evidence that EU migration has had a harmful impact on employment, wages, house prices and access to healthcare and education. EU nationals are not a drain on our public finances; they pay more in taxes than they receive in social benefits.

The MAC is not though championing the continuation of free movement for EU workers. It has concluded that the positive impact of EU migration is negligible, it can only really be seen in highly skilled migration, and that is has ‘neither the large negative effects claimed by some nor the clear benefits claimed by others’.

The MAC is therefore supporting the end to free movement and they have not been ambitious in their proposals for how to replace it. They are not recommending any new visa routes or a large scale overhaul of the immigration system to cater for EU migration post 2021. They do propose however some significant changes to the Tier 2 work permit system;

  • To abolish the Tier 2 cap
  • To open access to Tier 2 General to medium skilled jobs to avoid skill shortages. This would involve dropping the minimum skills threshold to NQF level 3
  • To maintain the current salary thresholds for Tier 2 – the MAC believes this allows employers to hire medium skilled workers as it would encourage them to increase earnings
  • To extend the immigration skills charge to cover EEA citizens
  • To abolish the resident labour market test (RLMT) – the MAC believes that salary thresholds and the immigration skills charge are a better way to protect UK workers from employers using migrant workers to under-cut settled workers
  • They suggest that if the RLMT is retained the Government should exempt more jobs from it by lowering the salary threshold which avoids the RLMT from £159,600 to below £50,000
  • The ability of Tier 2 visa holders to change employers once in the UK should be simplified
  • The shortage occupation list should be expanded to include roles below NQF level 6
  • The MAC also criticises the administrative burden that the Tier 2 scheme places on employers. They suggest steps to be taken to remedy this;
    • To involve sector bodies as ‘umbrella’ sponsors for their members
    • Encourages Government to survey firms who use the Tier 2 system to find out how it works
  • No changes to the Tier 2 ICT route were recommended

Employers who rely on low skilled EU labour will be disappointed by the report as the MAC are not offering many solutions for the labour shortages that many industries are envisaging. They state that a separate visa route or a sector based approach for low skilled work is not necessary; any shortfall can be made up by extending the Tier 5 Youth Mobility Scheme, which allows young people to find jobs in the UK on a two year working holiday, to EU countries. The MAC expects industries that rely on low skilled workers from the EU to simply adapt their businesses to attract resident workers. With less than three years to do this, many companies will be getting very nervous that they will not be able to source the staff they need.

We will find out to what extent the Government adopts the MAC’s recommendations in due course. Extending the Tier 2 and sponsorship system to EU nationals wanting to work in the UK will result in a flood of new employers wanting sponsor licences and an increase in the number of visa applicants. This will put pressure on the Home Office and the immigration system to meet this increased demand. For businesses who are considering applying for a sponsor licence, it is a good idea to start the process now to ensure that your business is protected for the future.

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Following the UK’s departure from the EU, the Trade and Cooperation Agreement sets out the shape of the ongoing future relationship between the UK and the EU and provides some degree of certainty for UK businesses.

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