24 Oct 2016, 43 mins ago

The Prime Minister confirmed in Parliament yesterday that the Home Secretary has written to the Migration Advisory Committee (MAC), asking it to advise on reducing migration from outside the EU. He said: “This government is on the side of working people: in the past, it has been too easy for businesses to recruit from overseas, undermining those who want to work hard and do the right thing. As part of our one-nation approach, pushed forward by my Immigration Taskforce, we have asked the Migration Advisory Committee to advise on what more can be done to reduce levels of work migration from outside the EU.”

The Government has asked the MAC to consider the following issues:

  • options to re-focus the route on areas where there are genuine skills shortages or require highly-specialised experts
  • how to limit the time that sectors are deemed to be in shortage
  • the implementation of a levy on Tier 2 visas, to fund apprenticeships
  • restrictions on the automatic right of Tier 2 dependants to work
  • tightening up on the intra company transferee (ICT) route, including applying the immigration health surcharge to ICTs
  • raising the minimum salary levels that economic migrants have to be paid

Many of the proposals in yesterday’s announcement were trailed in Mr Cameron’s speech on immigration on 21 May, in which he complained that for too long the UK has had a shortage of workers in certain roles, which companies have had to fill with people from overseas. He identified engineers, nurses, teachers and chefs as examples of the areas he had in mind. He stated the Government’s intention to consult on getting businesses that use foreign labour to help fund 3 million new apprenticeships through a new visa levy. He also stated the Government’s intention to limit the length of time professions can be classed as having shortages, so that “sectors that have become over-reliant on migrant workers will be encouraged to train Brits instead”.

This all suggests that the Government intends to go further than it indicated in its manifesto, in which it simply said it would maintain the cap on the level of skilled economic migration from outside the EU at 20,700 during this Parliament, although it did also say that it would only grant visas to “those who have the skills we really need in our economy”. It is possible that the Government intends to maintain the current cap whilst at the same time tightening the rules so much that the cap will never be filled.

Even at this early stage, there must be serious questions as to how these proposals can work in practice. Firstly, creating 3 million apprenticeships will not necessarily alleviate the need for recruitment from outside the EU. After all, the Government claims to have created 2.2 million apprenticeships over the last five years yet there are still skills shortages. Consequently, setting an arbitrary limit on the length of time a profession can be classed as having shortages may result in businesses collapsing because of a lack of available staff if suitable home-grown replacements are not available. However, it is more likely in such a situation that businesses will be forced to recruit from other EU Member States.

Another question concerns the level at which the proposed visa levy will be set? Even if the Government’s idea of replacing non-EU recruitment with domestic recruitment were to work, it is a medium- to long-term plan. If the levy is set too high, it may discourage employers from seeking to employ foreign labour before the first graduates of the Government’s apprenticeship programme are ready to replace them.

The link between the visa levy and the creation of apprenticeships likewise seems arbitrary. The Government stated in its manifesto that it intended to create these 3 million new apprenticeships during the next five years. The number of new apprenticeships therefore bears no relationship to the number of skilled migrants currently allowed in annually under the cap. Moreover, many skilled professions require degree-level or postgraduate or vocational qualifications. It is simply not going to be possible to replace these workers with people who have done an apprenticeship. It seems most likely in reality that the purpose of the levy will be to disguise a deterrent increase in Tier 2 fees and that linking the levy with the apprenticeships is intended to provide a populist justification for this increase.

The MAC is due to report back on the Government’s referral by the end of the year. Practitioners will be keeping a close eye on developments. However, it certainly looks as if the Government intends to make it more difficult and costly for employers to recruit overseas to fill skills shortages in the not too distant future.