MAC report isn’t a crowd pleaser for businesses

Published with the aim of informing migration policy after Brexit, the recommendations set out in the Government’s MAC (Migration Advisory Committee) report, which have been given an initial nod of approval by the cabinet, are essentially giving to the UK economy with one hand and taking away with the other.

In theory, abolishing the cap on highly-skilled migrant workers and extending the categories of employment eligible under the Tier 2 visa scheme, would be positive steps. However, the recommendations are unlikely to meet the needs of all UK businesses and a complete review of the system is required to avoid unfairly impacting struggling sectors.

Stressing the need for a more flexible and streamlined approach to migration post-Brexit, the MAC’s long-awaited report recommends scrapping the cap on highly-skilled migrants from outside the EU whilst giving preferential treatment to those earning more than £30,000 per year. While it goes without saying that attracting skilled talent will be crucial to the health of the UK economy post-March 2019, such a policy risks smaller businesses and under-skilled sectors losing out.

Under the new proposals, industries such as social care, hospitality and construction, which have historically been heavily reliant on lower-skilled EU migrants, could face a significant disadvantage when looking to take on new staff. Additionally, in failing to recommend a thorough review of the current Tier 2 visa system as part of its report, the MAC has missed an important opportunity.

Reassessing the UK’s shortage occupation list ahead of the report’s publication would have made it possible to address skills gaps in particular industries. However, as things stand, chronically under-resourced areas of the economy could find they are unable to recruit sufficient staff. While these industries may turn to mitigation strategies, such as placing a greater focus on nurturing domestic talent, in order to overcome skills shortages, it is important to recognise that such contingency measures will only have an effect in the longer term.

Another area where the MAC’s proposals fall short is their failure to acknowledge the value of overseas migrants to regional economies; especially in the greater London area. According to research commissioned by the London Chamber of Commerce and Industry, the capital is three times more reliant on foreign workers than the rest of the UK.

The MAC’s recommendations have also come under criticism for suggesting that the UK adopts a ‘Canada-style’ immigration system after Brexit. Adopting an impartial policy, which does not favour EU citizens over those from other countries, would fail to take into account the UK’s long-established relationship with the EU and the reliance of many businesses on EU workers. For example, sectors such as higher education, which have not been considered within the Tier 2 visa scheme, could be disadvantaged for many years to come if skilled lecturers are unable to enter the country with an EU passport. There is also a distinct lack of sector-specific labour schemes, other than for agriculture, which would help businesses to source the labour needed to meet seasonal peaks in demand. UK business relies heavily on highly-skilled EU workers such as bankers, doctors, engineers and professors, so the Government would need to abolish the cap on Tier 2 as recommended by the MAC in order to meet these demands.

While the cabinet has agreed in principle to a system focused on skills over nationality, and which is not biased towards EU immigrants, this may still be subject to change, especially in the event that the UK secures a comprehensive trade deal with the EU.

Another MAC proposal likely to be adopted as part of the Government’s Brexit immigration bill is that of extending the existing UK points-based system to EU citizens, meaning that they would need to be sponsored in the same way. For example, this would apply to a US national wishing to move to the UK for work. While this appears fairly straightforward in principle, it would in fact be unfeasible without significant changes to the current system. Similarly, while there have been discussions around lowering the skills threshold for higher-skilled migrants, such a change would require stringent monitoring policies, at a significant cost to Government.

In order to ensure a fair system and avoid a potential UK skills shortage crisis, the Government should undertake a thorough review of the current points-based immigration system, including a rethink of the Tier 2 visa scheme and an expansion of the shortage occupation list, before finalising post-Brexit immigration rules.

Additionally, with more UK companies likely to be reliant on the costly and burdensome sponsor licence scheme when recruiting overseas workers in future, reforms to this system should be prioritised to avoid bringing them under further pressure, impacting the UK’s productivity. The Government may even consider opening a route for lower-skilled migration, such as Tier 3 of the points-based system. This was never open previously because there was felt to be a sufficient supply of labour from those exercising free movement from the EU.

Before making a final decision regarding its post-Brexit immigration policy, the Government must weigh up the importance of developing a streamlined and flexible system against the need to cater to businesses of all sizes, across a vast range of sectors. Taking this approach, it should be possible to address skills gaps and secure the future of the UK economy after Brexit.

Tijen Ahmet is a legal director and business immigration specialist at law firm, Shakespeare Martineau.


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