The UK government’s Migration Advisory Committee issued a report this week assessing the impact of immigration from the European Economic Area and suggesting ways for the government to reform immigration policy in preparation for the UK’s exit from the European Union next March. Once Brexit is fully implemented in 2020, freedom of movement is expected to end between the UK and the EU, meaning UK employers will no longer be able to seamlessly recruit workers from other European countries, which employers fear may lead to labor shortages in a range of industries from agriculture and construction to hospitality, health care, and finance.
The MAC report concludes that there is no need for the UK to continue to have separate immigration rules for EU/EEA citizens and migrants from other countries. The committee’s main recommendation for alleviating these potential shortages is to remove the cap on Tier 2 skilled-worker visas, People Management explains:
Along with ending the Tier 2 (General) visa cap, the report also suggested extending Tier 2 eligibility to medium-skilled roles and abolishing the resident market test list but retaining the £30,000 salary threshold. It added the immigration skills charge should also cover EEA citizens. The report noted these changes “would allow employers to hire migrants into medium-skill jobs but would also require employers to pay salaries that place greater upward pressure on earnings in the sectors”.
Tier 2 visas became a concern for employers earlier this year as restricted certificates of sponsorship – which must be obtained by UK employers hiring non-EEA staff – were continuously oversubscribed for in the first half of 2018. Pressure on the system only eased after the government removed NHS doctors and nurses from the cap.
The main upshot of this proposal is that highly skilled talent would be relatively easy to recruit from other countries, but low-skill workers would not. Writing at Personnel Today, Kerry Garcia and Jackie Penlington from the law firm Stevens & Bolton LLP take a closer look at what the MAC’s scheme would mean for employers:
The real headliner from the MAC report is its recommendation that there should be no preferential access to the UK for EEA citizens in the future and that the MAC sees no need for a new immigration scheme for low skilled workers. This conclusion is perhaps more surprising given that the report also concluded that EEA migrants actually make a positive net contribution to public finances, paying more in taxes than they receive in benefits. …
This conclusion will be extremely disappointing to many employers who rely heavily on EEA labour to fill low-skilled positions, especially in the social care, hospitality, construction and retail sectors. Sourcing sufficient workers for these types of roles from the UK workforce is likely to be a real struggle for many employers, especially given historic low unemployment rates.
Although employers may welcome some of the committee’s proposals, such as the expansion of the Tier 2 visa program and the abolition of some barriers to recruiting from abroad, Garcia and Penlington figure that “even if the above changes are made, far less than half all roles would be eligible for sponsorship under Tier 2 (General),” and thus would have to be filled by UK citizens. In its analysis, the Institute for Public Policy Research estimated that 75 percent of EU nationals currently working full-time in the UK would be ineligible for admission under the MAC’s proposal, People Management reports:
Using data from the Office for National Statistics (ONS) labour force survey, the IPPR calculated hotels and restaurants – where an estimated 97 per cent of EU workers currently employed would be ineligible under the MAC proposals – would be the industry hardest hit. This was closely followed by the transport and storage sectors, where 95 per cent of EU workers would be ineligible, and wholesale and retail (92 per cent).
The IPPR was not alone in criticising the impact the MAC proposals could have on certain sectors. Ben Willmott, the CIPD’s head of public policy, said it was “very disappointing” that the report “largely ignored the importance of routes that will enable employers to access low-skilled workers from the EU”.
“We welcome the suggestion that the Tier 5 youth mobility scheme could be extended to EU workers to fill low-skilled roles,” Willmott added. “However, this in itself is unlikely to address significant long-standing labour shortages in key sectors such as retail, hospitality and social care.”
The committee’s recommendations will not necessarily translate into government policy, Macfarlanes LLP attorney James Perrott points out at Lexology:
If the MAC’s recommendations were implemented in full, it would actually have the effect of rolling back a large number of the changes that have been made to the Tier 2 category by the current Government over the last 10 years, which have included increasing the minimum skill level for Tier 2 and introducing an annual quota for Tier 2 (General). The Government has stated that it will “carefully consider the proposals” and, although in the past the Government has followed the MAC’s recommendations, it will be a surprise if they agree with all of the MAC’s proposals on this occasion.
This post is published for informational purposes only and does not constitute legal advice or an opinion on the legal matters discussed within. Employers should consult their general counsel whenever they have questions pertaining to laws, regulations, or potential liabilities.