The Migration Advisory Committee's latest report on Brexit

By Yuichi Sekine

02-2020

The Migration Advisory Committee ("MAC") recently published their much awaited report on the Australian-style Points-based system as a model for the UK's future immigration system. To many immigration lawyers, the report came as a surprise as it suggests no significant changes to the existing Points-based system that has been in place since 2008.

This 2020 MAC report builds on their 2018 report dealing with EU migration. In the 2018 report the MAC made radical recommendations to relax the overall requirements for a work visa under the Tier 2 (General) route, for example: abolishing the annual cap on work visas, eliminating the resident labour market test and reducing the job skills threshold. The 2020 MAC report makes it even easier for employers to sponsor highly-skilled and medium-skilled migrants by proposing to reduce the minimum salary threshold from £30,000 per year to £25,600 per year.

Having said the above, there are many important issues still to be addressed before the end of this year:

1) Employers contemplating hiring EU nationals from outside the UK from 1 January 2021 (after the end of the Brexit transition period) will require a sponsor licence, unless the Home Office introduces a new system which is streamlined and user friendly. This is likely to create a surge in demand for licences, which will create more delays due to capacity issues within the Home Office.

2) Employers seeking to recruit new workers from the EU from 1 January 2021 will face significant cost pressures as a typical Tier 2 (General) work visa valid for three years for a large company will cost approximately £5,000 in Government fees alone.

3) There is very little discussion surrounding low-skilled workers. The December 2018 White Paper published under Theresa May's government describes a separate visa category to allow low-skilled workers from low risk countries with strict conditions (e.g. 12 months maximum duration with a cooling-off period of 12 months). The 2020 MAC report unfortunately does not shed any more light on what this route will look like and whether there will be any special requirements to qualify.

4) The proposed £25,600 minimum salary threshold is still too high for some sectors, such as the retail and consumer industry. Many franchise restaurants, for example, may not be able to pay this level of salary for their chefs. Whilst the 2020 MAC report does not suggest a variation in the minimum salary threshold across different sectors in the UK economy, the Government may need to consider this in order to address the acute shortage of workers in some sectors.

5) Businesses only have 11 months to prepare for the new Immigration Rules to take effect. As with the previous introduction of new rules, we foresee confusion and inconsistencies in the decision-making process by the Home Office. This is likely to cause more delays and frustration on the part of businesses and workers.

Whilst the new 2020 MAC report provides important information, there remains a substantial number of issues to be resolved in order to create a better immigration system that benefits employers and protects our resources (e.g. medical care, roads and social services) from being overwhelmed.

Given that this 2020 MAC report may not go far enough in the eyes of the Government, it is certainly possible for Mr Johnson to go beyond their recommendation. However, the administrative machinery of the Home Office may not be able to incorporate such drastic changes by the end of this year.
We await the discussion of the 2020 MAC report amongst Cabinet ministers next month and it is expected that a new White Paper on the future of business immigration policy will be published shortly thereafter.

Employers are advised to remain vigilant for further updates.