24 Oct 2016, 54 mins ago

MIGRATION ADVISORY COMMITTEE SETS OUT EARLY ADVICE TO GOVERNMENT ON TIER 2 SALARY THRESHOLDS – Government urged to be cautious over any early decision to raise the minimum salary requirement.

The Migration Advisory Committee (MAC) offers independent, evidence-based advice to the government on migration issues. The MAC was commissioned in June of this year to carry out a review of the Tier 2 route. The commission was split into two parts – the early advice on Tier 2 salary thresholds and a wider review which will be delivered to Government this December.

The MAC has recommended that the government should be cautious in making any significant changes to the salary thresholds at this stage. This will be welcome news for Sponsors and applicants alike and it is hoped that the government will heed the MAC’s recommendation in this matter. The report, “Review of Tier 2: An analysis of salary thresholds” goes on to recommend that salary thresholds should be considered in conjunction with the wider Tier 2 Review findings and in particular the impact of introducing a skills levy on employers. It has been reported that a spokesman for the Home Office has stated: ‘We thank the Migration Advisory Committee for their report. We will consider its finding and respond in due course”.

One of the most salient points the early findings from the MAC’s report highlights is: there is little evidence to suggest that the there is widespread undercutting of UK resident workers by Tier 2 migrants occurring under the current salary thresholds, however, this will be subject to further analysis as part of the wider review.

This is a fundamental finding given that it does not support the government’s position that the volume of highly skilled workers that come to the UK are putting the local population at a disadvantage and that reducing the number of highly skilled workers that we allow into the country is an effective way to reduce net migration – the governments ultimate goal. The government have been making changes to the Points Based System at large in recent years, with increasing frequency it seems, in a bid to decrease net migration.

If the government go ahead with any early decision to increase the minimum salary thresholds it may have a pronounced, detrimental effect on particular industries. The healthcare profession, for instance, rely on employing experienced nurses from outside the UK. An increase in the minimum salary threshold could mean fewer nurses from outside the EEA would qualify for Tier 2 sponsorship as they would not meet the salary requirement, in turn this could mean that patient care could be affected if health care organisations are not fully staffed fully with experienced nurses.

For other employers, who can absorb the increases will have to do so of course by submitting to a forced increase in their annual salary budgets in order to continue to hire Tier 2 (General) migrants. This begs the question though – how long would they find this sustainable before looking to employ staff in other locations around the world rather than the UK? The wider review will address this issue to try to establish what the impact of the increased salary threshold will have on potentially affected industries and professions.

The BBC report: ‘restricting Tier 2 migrants could “limit UK productivity growth”, with the introduction of a higher salary threshold causing “serious problems in particular sectors, including the education and health sectors”. Firms questioned by researches for the report also warned that making it more difficult for migrants to take up jobs in the UK could force them to expand their businesses overseas.

The MAC goes on to assert though that there is a good case for increasing the overall minimum threshold for Tier 2 (General) – currently £20,800 – because this was calculated in 2009 when the skill requirement for migrant workers was much lower than it is now.

One can’t help but think there must be more effective ways for the government to reduce net migration. On the one hand the party line from the government is that Britain is open for business and on the other they are taking action, in regards to immigration, that may hurt and deter business in the UK.

We await the results of the further review in December 2015.

The MAC relies heavily on contributions to the consultation in order to be able to provide representative recommendations to the government. Employers, advisers and interested parties may submit a contribution here.

And you can find the MAC’s full report here.