- BY CJ McKinney
Government advised not to bother with points based gimmick for migrants with job offers
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The government should think twice about re-introducing a points based immigration system after Brexit, and lower the minimum salary necessary to get a work visa, the Migration Advisory Committee (MAC) has recommended.
In a report published today, the MAC says that the existing Tier 2 (General) work visa system should be left intact, with employers continuing to sponsor workers with a job offer. By contrast, Tier 1 (Exceptional Talent) visas could be allocated using a points calculation, if the government is really so keen on it.
Key recommendations include:
- Retaining the Tier 2 (General) skilled worker route, because “the combination of skill eligibility and a salary threshold works well for an employer-driven system”.
- Reducing the minimum salary threshold to around £25,600, instead of the £30,000 recommended in the MAC’s last major report.
- Turning Tier 1 (Exceptional Talent) into a points based route for skilled workers without a job offer, since at the moment it “does not work well” anyway.
While the Conservatives have plugged the idea of an “Australia-style points based system” as a radical new departure, the MAC knows that we have been here before. It reviewed the previous use of pure points-based routes in the UK, including the Highly Skilled Migrant Programme, Tier 1 (General), and the early days of Tier 2 (General). The data is extremely limited, making firm conclusions difficult, but “the scraps of information available” suggest that “a sizeable proportion did not end up working in highly-skilled jobs as was intended”.
As such, the MAC cautions, “any changes should not repeat mistakes made in UK systems in the past but draw on best practice from other countries”. Such best practice would “include a cap [on numbers] and the use of the Expression of Interest system”.
The economists try to steer ministers away from interfering with Tier 2, partly because employers think being able to sponsor individual workers from overseas is rather important. Instead, their report says that the place for points is Tier 1, in particular the Exceptional Talent route which “does not work well” and is “failing to meet all its objectives”.
Given these problems, if the Government wants to have a PBS route on entry, it could make sense to re-orient Tier 1 (Exceptional Talent) with the aim of increasing the numbers though the challenge is to do this without significantly affecting quality.
This may be regarded as unfortunate timing, since the government is pushing through unrelated reforms to Tier 1 (Exceptional Talent) on Thursday.
But if the report’s approach were adopted, the resulting mixture of sponsorship and unsponsored migration would reflect how countries with points based immigration systems do things. In Australia, Canada and New Zealand, the MAC calculates, people arriving without a confirmed job offer through points based routes only account for about 40-60% of economic migration. Those nations still use employer sponsorship as well.
The report is expected to be influential in the design of the UK’s post-Brexit immigration system, under which EU citizens will come under the same visa rules as non-EU citizens, but those rules will be made more liberal overall. That includes a lowering of the minimum salary required for a work visa, from £30,000 today to under £26,000 (the exact number depends on a fairly technical calculation). This recommendation is not a surprise, in the sense that the MAC had previously recommended keeping the threshold at £30,000 and was told to try again.
The post-Brexit dispensation taking shape is expected to “result in a lower level of immigration, a lower rate of growth in population, employment and GDP”. But there is a glaring caveat not reflected in some of the breathless coverage of today’s report. MAC chief Professor Alan Manning writes that “almost all of these estimated impacts at the macro level are small”. In other words, while the end of free movement has real human impacts, the MAC does not think that it has particularly significant economic effects.
The report also reveals that Professor Manning is not being kept on as Chair of the Migration Advisory Committee, despite his desire for a second term. The government is advertising for a replacement.
Points-based systems
1. We recommend retaining the existing framework for Tier 2 (General).
2. If government wants to have a PBS route on entry, it should consider modifying Tier 1 (Exceptional Talent) in the following way:
• There should be an overall annual cap on those admitted;
• The route should operate on an expression of interest basis creating a pool of migrants interested in coming to the UK;
• There should be a monthly draw from this pool with those selected invited to submit a full application;
• The selection of those invited to apply should be based on those who have the highest number of points in the pool using a points-based system with tradeable points;
• There should also be an absolute minimum number of points;
• Points should be given for characteristics that the Government wants to attract through this route and for whom other routes are not suitable;
• Among the characteristics that the Government might want to consider in assigning points are: Qualifications with a rigorous process to assess the quality of qualifications and not just the level; Age; Extra points for having studied in the UK; Priority areas such as STEM and creative skills.
• Changes should only be made if data is collected on the outcomes of migrants on this route, with monitoring and evaluation of the route.
3. There should be an immediate pause in the proposed increases to the settlement threshold.
4. We recommend a review of the requirements for settlement, to establish a clearer picture of how it is currently working and possible changes that could be made.
Salary thresholds in Tier 2 (General)
5. Both the occupation specific and general salary thresholds should be based on the relevant distribution of full-time earnings as reported in the Annual Survey of Hours and Earnings (ASHE) and updated annually. The appropriate salary threshold should continue to be the higher of the occupation specific and general threshold.
6. The occupation specific threshold should be the 25th percentile of the full-time annual earnings distribution for that occupation.
7. The general threshold should be set at the 25th percentile of the full-time annual earnings distribution for all Tier 2 (General) eligible occupations.
8. National pay scales should be used as the relevant salary thresholds in 24 occupations in health and education instead of both the occupation specific and general thresholds.
9. If the Government is concerned about the impact of the general threshold on lower-wage medium-skill occupations, we recommend the use of an occupational cap to be set at the 75th percentile. We do not recommend this given the level of the general threshold we propose.
10. There should be more adequate monitoring of how migrants are faring in the UK labour market after entry and ongoing review of the impacts of the recommendations on levels of salary thresholds.
11. The relevant salary thresholds should apply across the UK.
12. There should be a separate pilot visa for ‘remote’ areas of the UK, part of which could be lower salary thresholds for migrants into those areas. This should only be done with a full evaluation to understand its effectiveness and impacts.
13. Salary thresholds should not be pro-rated to allow for part-time work.
14. The Government should consider more flexibility (i.e. prorating salary thresholds) for visa holders switching to part-time work after becoming a parent.
15. Only salary on the main job should be used to determine whether the salary threshold is met. Allowances, equity and employer pension contributions should not be included.
16. The rules on Tier 2 (General) visa holders owning equity in the employer sponsoring them should be reviewed.
17. Occupations on the Shortage Occupation List should not have lower salary thresholds for entry.
18. We recommend a review of whether the SOL is needed after the new immigration system has been fully introduced.
19. National pay scales should be used as the relevant salary thresholds in 24 occupations in health and education instead of both the occupation specific and general thresholds.
20. The salary thresholds for new entrants should be a single ‘reduction’ percentage applied across both the general experienced worker threshold and the occupation specific experienced worker thresholds.
21. The reduction percentage for new entrants should be set at 30 per cent.
22. The definition of a new entrant should be widened to include those are working towards recognised professional qualifications and those who are moving directly into postdoctoral positions.
23. The new entrant rate should apply for five years, an extension from the current three-year entitlement. Any time spent on the new post-study work route should count towards the five years of new entrant threshold eligibility.
24. We recommend adding/removing the following occupations from the list of RQF3+ occupations
• Add: Air-conditioning and refrigeration engineers, Rail and rolling stock builders and repairers, Skilled metal, electrical and electronic trades supervisors, Carpenters and joiners, Glaziers, window fabricators and fitters, Plasterers, Floorers and wall tilers, Painters and decorators, Construction and building trades supervisors, Childminders and related occupations, Teaching assistants and Educational support assistants.
• Remove: Fishing and other elementary agriculture occupations n.e.c. and Waiters and waitresses.
Data issues
25. The Government and ONS should seek to link datasets across government to allow a better understanding of the employment outcomes of migrants, for the purposes of research whilst ensuring confidentiality.
26. The Government should invest in a data set designed to link migrants with subsequent outcomes to be used for the evaluation of all visas.
27. The Home Office should ensure it retains historical data on migration routes in a usable format for future analysis.
28. The Home Office should publish breakdowns of entry clearance visas disaggregated by gender on a regular basis.
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