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What’s the future of the Shortage Occupation List?
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There is only a day left to respond to the Migration Advisory Committee’s (MAC’s) current call for evidence on what roles should appear on the Shortage Occupation List. Employers have until 26th May 2023 to put forward their cases for why certain job roles and types should be added to or keep their place on the list.
As with their other reports, the MAC has said that it will consider this evidence to decide which occupations are in shortage in the UK and if it is appropriate to fill these shortages with migrant workers. These roles may then be added to the list, enabling employers to benefit from lower salary thresholds and application fees for the skilled worker route.
For many industries that are struggling to fill vacancies, getting jobs on the list appears like a victory, bestowing them with public recognition of the shortages they face. But is getting on the list really the game changer it may appear? The concern is that by focusing on what jobs should appear on the list, we have lost sight of what advantages the list actually confers, and whether they make a meaningful difference to the employers trying to recruit within those areas.
The shortage occupation list under the previous system
The MAC was set up to review the list in 2008 around the time that the points based system was launched. The idea was, and still is, that they will provide transparent, independent and evidence-based advice to the government on where shortages of skilled labour can sensibly be filled by immigration.
Under the Tier 2 (General) route, the list had some significance. Along with the lower salary thresholds and visa fees, it offered employers the chance to avoid advertising a role in line with the ‘resident labour market test’. This required an employer to post an advert (with specific content) in two places (with screenshots taken on certain dates) for 28 days to show that there was no one else within the settled labour force who could do the role. It caused no end of headaches for employers and representatives, increasing processing times from weeks to months and in some cases leading to applications being rejected for minor deviations from the requirements.
When the skilled worker route was launched in late 2020, the resident labour market test was dropped (cue cork popping in immigration practices around the UK). This simplified the process significantly for both shortage and non-shortage sponsorship applications.
Under the skilled worker route the shortage occupation list still offers some important advantages for employers. For jobs on the list, the salary limits for a role are reduced so an applicant need only be paid 80% of the going rate for that particular job or at least £20,960, whichever is the lowest. Application fees are reduced for these jobs. For example, applicants from outside the UK pay £625 and applicants based in the UK pay £719 for a three-year visa. But this is reduced to £479 for applicants with jobs on the list. There is also a beneficial regime for individuals who want to apply for settlement after five years, as lower salary limits will apply.
But that is pretty much it. With Brexit, COVID and early retirees causing staffing shortages for many industries, the list is now more important than ever. The fear is that it has become one of those convenient immigration policy soundbites, which ministers routinely use to deflect tough questions on skills shortages but makes very little practical difference for employers.
Reforming the shortage occupation list
With this in mind, it’s time the MAC looked at how the list could be reformed to help ease some of the other barriers to companies seeking to use this visa route for lower skilled roles; the visa costs and the English language requirement.
It has been said many times before that sponsorship fees are very high. The list goes some way to remedy this by reducing the application fees. However, the other associated fees such as the Immigration Skills Charge (£1000 per year for someone joining a medium to large company) and Immigration Health Surcharge (£624 per year) are still payable.
For companies seeking to recruit large pools of labour to fill shortages, for instance in the construction sector, they are likely to struggle to pay tens of thousands of pounds on visa fees to recruit relatively low-skilled labour. Companies can opt to use clawback clauses in employment contracts, where visa fees are recouped if an applicant leaves a job early, to protect themselves financially. But these clauses are controversial. They increase the risk of vulnerable applicants getting trapped in bonded labour by unscrupulous employers.
One simple way to remedy this would be to reduce fees slightly by exempting roles on the list from the Immigration Skills Charge. Introduced in 2016, the skills charge is designed to deter employers from hiring overseas workers and to funnel the recouped funds to address skills and training gaps in the resident workforce. The MAC has supported the use of the skills charge because, alongside salary thresholds, it saw it as the best way to protect against employers using migrant labour to undercut domestic workers.
If the Home Office accepts that certain skills are lacking in the UK so as to justify their inclusion in the list, penalising employers via the skills charge makes little sense. The Home Office already has a designated list of standard occupation codes that are exempt from the skills charge, including the jobs at PhD level, clergy and sport-based role. It would be simple to extend these to cover roles on the list and help alleviate the financial burden of sponsorship.
English language requirement
The other major barrier to using the skilled worker system for companies recruiting lower-skilled roles is the English language requirement. The Home Office expects a worker to be able to read, write, speak and understand English to at least level B1 of the Common European Framework of Reference for Languages in order to obtain a skilled worker visa. Applicants who are not from a majority English-speaking country or do not have a degree taught in English have to pass a secure English language test offered by an approved test provider.
The argument for having this requirement is sound. The ability to speak English prevents workers from exploitation and helps them integrate. But for applicants who have to resort to taking a test, the English language requirement creates issues in two ways. It can add to processing times due to the lack of availability of tests (it can take up to a month to get a test in certain countries). And it can prevent workers from applying who may not be able to reach the required standard in English. This risk is particularly acute for sectors that recruit manual roles on the shortage occupation list where English language skills are not needed.
In 2021, the National Pig Association appealed to the Home Office to drop the English language requirement for butchers. They wanted to allow pork butchers into the UK to prevent a cull of pigs due to a lack of butchers at slaughterhouses. Butchers were skilled enough for the skilled worker visa but the language requirement was preventing them from applying. The government responded by instigating a temporary visa to ease the problem but refused to drop the language requirement.
As a compromise, for the roles on the list the English language requirement could be dropped for an initial application and the length of the visa could be limited. The English language requirement could then be assessed at the visa extension stage, when a worker has had a chance to assimilate. A similar process used to be followed under the ICT route many years ago.
Alternatively, the Home Office could drop the level of English required for jobs on the list by assessing workers on their English language skills in speaking and listening rather than reading and writing, or lowering the level of English required down to level A1 as it is for family-based applications. This would ease the burden on workers who may not have the academic skills in those areas but ensures workers are still able to advocate for themselves in English, reducing the risk of exploitation.
Industries will soon realise that getting roles on the shortage occupation list is not the panacea they had assumed. The pressure will increase on the government to offer them something more substantial, and some simple tweaks to the advantages offered by the list could make all the difference. These proposals may., though, be wishful thinking. The immigration skills charge makes the Home Office millions and with numbers of Skilled Worker applications rising and net migration at an all time high, there is little political will to make the Skilled Worker route more appealing. Recent reports suggest Labour would even scrap the discount on the salary threshold for the shortage occupation list if they get in power. Unfortunately this is likely to stymie any meaningful development of the list in a way that could alleviate labour shortages.