Migration Advisory Committee recommends next steps for skills-based immigration

A Migration Advisory Committee report last week has offered Boris Johnson's administration a direction of travel for a points-based immigration policy. We look at what it recommends and where it leaves employers and business.

On the 28 January 2020, the Migration Advisory Committee (MAC) published its long-awaited report on a future points-based system (PBS) and salary thresholds. The MAC envisages a two-tier system for those with and without a job offer and advises caution over any "Australian-style points-based system". While it remains unclear as to the shape of the new system - although employer sponsorship access for skilled talent look set to be opened up – business has broadly welcomed many of the proposals.

The MAC report follows a significant and comprehensive report produced in September 2018 on the immigration system after Brexit and the subsequent white paper, "The future skills-based immigration system", published in December 2018. Last week's MAC report had been explicitly tasked with reviewing an "Australian-style points-based system" and the proposed salary thresholds, given these remained a significant area of concern for businesses in the white paper.

What has the MAC recommended?

Despite many of these areas having already been considered in its previous reports, the MAC has recommended that concessions are made in some areas.

For those with a job offer – and to avoid a PBS – the MAC report recommended a continuation of the current Tier 2 (General) system with amendments:

• Reduce salary thresholds, including both general and occupation specific, to the 25th percentile (advising £25,600) and update this annually.
• For health and education jobs, base the salary threshold based on the national pay scales.
• Do not have regional variations within Tier 2, however, consider a specific pilot scheme for "remote" areas.
• Introduce pro-rated salary thresholds for visa holders who become parents and go part-time.
• Widen "new entrant" thresholds to include more categories of people, to last for five not three years, and be a fixed percentile reduction of 30% for both the general (that is £17,900 per annum) and occupation specific thresholds.
• Remove inclusion of allowances, guaranteed bonuses and equity in salary calculations
• Scrap the Shortage Occupation List, as this will be redundant with other suggestions (removal of the Resident Labour Market Test and cap on numbers).

The report also recommended the use of PBS for those without a job offer and modification of the current Exceptional Talent visa that includes measures to:

• Retain an overall annual cap.
• Operate the route on an "expression of interest" basis, creating a pool of migrants interested in coming to the UK and, from this, a monthly draw to invite those who score enough points to apply for a visa.
• Require an absolute minimum number of points.
• Award points for characteristics that the Government wants to attract through this route and for whom other routes are not suitable.

Among the characteristics that the Government might want to consider when assigning points are:

• qualifications, with a rigorous process to assess their quality and not just the level;
• age;
• extra points for having studied in the UK; and
• priority areas such as STEM, or science, technology, engineering and mathematics, and creative skills.

The MAC envisages a two-tier system, separating those with a job offer from those without. It advises that the current Exceptional Talent route "does not work well" and that “the skills bar for entry is set too high, targeted at those at the very top of their field, and is too risk averse”. It advises the government to act with caution when looking at an Australian-style PBS, acknowledging that we have in fact had this since 2008 but it has become unrecognisable due to it not having worked for the UK in the past.

Despite not recommending the introduction of a temporary visa route for low skilled workers, the MAC accepts that, under the new immigration system, those sectors which rely on lower skilled migration will be negatively impacted.

MAC job

In the past, the government has generally followed the advice of the MAC but several announcements made in the weeks preceding this report would appear contrary to its recommendations. It was only last month that Number 10 announced that the salary threshold would be scrapped completely rather than reduced. It was only last week that it announced a new Global Talent visa commencing on the 20 February 2020 to replace the Exceptional Talent visa, which still requires endorsement from a recognised body and is not based on a points assessment.

While this appears to indicate that the government does not intend to follow the recommendations of the MAC – which they are not obliged to do – the language used in the MAC's report is similar to that used by the government. The report also continues to reference a PBS despite acknowledging its existence for over a decade. In addition, previous announcements were of such vague detail that they have left significant wiggle room. For those who are not well versed in the immigration laws of the UK, there is scope to spin the government announcements and MAC report as one and the same ahead of any formal policy announcements.

While it remains very unclear as to what the system in January 2021 will look like, we believe the combined public information provides a fairly strong indication, irrespective of what the system or systems are actually called. The route for employers to sponsor workers will continue and expand to enable sponsorship of more people. The routes for highly skilled talent – even without a guaranteed job – will be opened up to more people. Although criticisms remain, many of the proposals have been welcomed by business.

It could also be argued that other announcements related to immigration, such as the re-opening of the Post-Study Work visa, indicate that we may end up with a broader immigration system that suits many sectors of UK business better than our current system. It will never be as seamless as freedom of movement for EU citizens. Overall immigration will undoubtedly fall but there will be a significant increase of numbers from those outside the EU who are deemed skilled enough. This won't help businesses who rely on a steady flow of low-skilled labour and the government will need to find alternatives.

Future blueprint

Whether it has struck a fair balance between appearing strict on immigration and meeting the nation's needs will remain to be seen. What the MAC report does give us is a blueprint for the future, and that means we can start to advise our clients on the best way to plan accordingly, with early engagement crucial for future stability.