EU migration post-Brexit: recommendations of the Migration Advisory Committee

By Yuichi Sekine, Jonathan Goldsworthy, Tom Mintern, Sam Rayner, Emily Au,

10-2018

In September 2018, employers and EU citizens welcomed the final report from the Migration Advisory Committee (MAC), which sketched the outline of a future migration landscape for EU workers.

Set against a backdrop of speculation and uncertainty, the report is a valuable indicator of post-Brexit policy for employers and workers alike. Although the highly anticipated report is not binding on the government’s plans, it is considered to carry persuasive weight.

The broad policy direction recommended by the MAC is for the current work visa scheme, applicable to non-EU workers, to be extended to EU migrants, with some adaptations to attract higher-skilled workers.

The recommendations are preceded by a litany of evidence indicating the impact of EU migration on the labour market, productivity, prices, public finance, public services and local communities. Whilst much of this research is inconclusive, or shows little to no effect of migration on the UK, there is typically a positive effect of higher-skilled migrants on employment rates, wages, productivity and innovation.

Attracting high and medium skilled workers

As a result, a key recommendation is aimed at attracting high and medium skilled workers over lower-skilled workers. Under the current migration scheme, most non-EU workers are granted the right to work under a Tier 2 (General) visa. This requires them to hold a job offer classed at skill level NQF 6 (degree level), which must additionally meet minimum salary thresholds. The MAC proposes that the skill level required be reduced to NQF 3, but that the minimum salary requirements are maintained. If these plans came to fruition, employers would benefit from a wider recruitment pool even after Brexit, particularly for those reliant on medium-skilled workers, such as waiters, plumbers and chefs. Whilst this would be a positive move for labour market competition, employers should be cautious to ensure they meet the salary thresholds, which are often demanding.

A number of the MAC’s proposals support a loosening of restrictions on employers who are recruiting workers from abroad. The report advises the abolition of the existing cap on Tier 2 (General) visas, which would bring greater certainty that employees will granted the right Proposals for a framework for EU migration from March 2019 have been detailed by the independent public commission for migration to work, in turn allowing employers to plan ahead.

The Committee further calls for reviews of the Resident Labour Market Test and the Immigration Skills Charge, which employers would be obliged to undertake when hiring EU workers. These changes are intended to ease the administrative and financial burden of this process on employers, with a focus on small and medium sized businesses.

Low-skilled workers

Low-skilled workers, who do not hold a job offer worth at least £30,000, would not be provided for under the MAC’s plans. Instead, the Committee envisages low skilled labour needs being satisfied by an expansion of the Youth Mobility scheme (Tier 5 visas). This visa route allows workers between the ages of 18 and 30 to obtain the right to work for up to two years. Currently, these younger migrants must then return to their home country; the MAC advises the development of a path to allow Tier 5 visa holders to transfer their status into a Tier 2 (General) visa. These changes would be welcome measures for employers, as it is comparatively cheaper to hire workers under the Tier 5 system, and the retention of younger migrants beyond their initial visa would allow employers to better plan and invest in their workforce. However, there are employers who fear they would not be able to continue recruiting EU nationals into low skilled jobs after Brexit and believe the proposed plan is not sufficient to meet their needs.

The absence of a clear mobility scheme for low-skilled work is likely to result in a dearth of workers across a number of sectors. The government is expected to depart from the MAC’s proposals for low-skilled workers, to avoid labour market shortages. The Prime Minister and Home Secretary have already indicated their intention to provide a new immigration system offering visas in specific sectors, such as agriculture, healthcare and social care, including those on lower salaries. Further recommendations made in the MAC report encourage greater flexibility to the restrictions on Intra-Company Transfer visas, a review of the sponsor licensing system, and better engagement by the government with users of the visa system.

White Paper confirming migration policy

The government is now expected to publish a White Paper confirming their intended migration policy for EU nationals. Migration of EU citizens is expected to play a critical role in Brexit negotiations, and it remains possible that UK migration policy will deviate from the MAC recommendations, to favour EU workers. In the face of these ongoing negotiations, the government’s policy plans are unlikely to be detailed until 2019.

Employers reliant on migrant workers are well-advised to begin planning their post-Brexit workforce needs as early as possible, to facilitate the development of an optimum compliance strategy. All businesses should anticipate a costly administrative process to retain the ability to hire from abroad, although the details of the extent of this are yet to be determined. Those reliant on high and medium skilled workers can predict that a migration scheme will be in place to cater for their requirements. However, recruitment for low skilled work may need to be more strategically directed at younger migrants or the resident labour force.

Employers who have yet to obtain a licence from the Home Office to sponsor migrant workers may wish to consider applying for one, if the government follows through with their published intention to incorporate EU nationals into the existing Tier 2 visa scheme.

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