UK should keep migrant salary threshold, says advisory report

The UK government's Migration Advisory Committee recommended retention of the controversial minimum salary threshold when it published its recommendations for a post-Brexit immigration system on Tuesday.

Migration Advisory Committee Report January 2020
The Migration Advisory Committee - an independent body of experts providing advice to ministers - also said an Australian-style, points-based system should only apply to foreign workers coming to the UK without a pre-arranged job offer.

Why have salary thresholds?

Medium- and high-skilled migrants with a job offer would have to meet a proposed minimum salary threshold of £25,600, rather than the current £30,000.Business groups had wanted the threshold scrapped altogether or, in a proposal last week backed by a variety of industries, health bodies and educational organisations, suggested a £20,000 minimum.But the committee backed retention of the threshold and said the UK should maintain even higher minimums for better-paid occupations.Prof Alan Manning, who chairs of the committee, said, “Salary thresholds prevent undercutting in the labour market, ensuring that employers are not hiring migrants simply because they are cheaper.”

Employers: most surveyed opposed to salary thresholds

The report said most employers surveyed were opposed to salary thresholds as it could “add to costs and make running businesses harder”. But the MAC argued that keeping the threshold would ensure migrants paid enough taxes to “improve the public finances,” and would help transform the UK into a “high-wage, high-skill, high-productivity economy”.

Teachers, skilled NHS workers and new migrants should have lower salary thresholds

However, it said teachers, skilled NHS workers and new entrants should continue to benefit from lower salary thresholds and that the Shortage Occupation List should be regularly reviewed.
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On the points system that Prime Minister Boris Johnson has pledged to introduce, the MAC report said would-be migrants should receive more points according to the types of skills the government wanted to attract, such as those qualified in science, technology, engineering and mathematics.The report said the government should determine the “characteristics” to be awarded points, but the MAC highlighted elements including a command of English, educational and professional qualifications, age, whether a person had studied in the UK, and knowledge of STEM.

Immigration for creatives: Rewarding exeptional promise rather than exeptional talent

It also backed higher points for applicants in creative fields, saying the government should reward “exceptional promise” and not just “exceptional talent”.The report said the skill threshold could have mixed impacts on the UK economy, mainly because it would curb the flow of EU migrants, whose free movement rights will end when the Brexit transition period is complete.

UK immigration: regionally-specific visas

Among other recommendations were the introduction of a pilot project offering regionally-specific visa to attract people to work in remote parts of the UK, and improved monitoring of the immigration system to accurately assess if the new post-Brexit rules are working properly.“Our recommendations are likely to reduce future growth of the UK population and economy compared to freedom of movement, by using skill and salary thresholds," said Prof Manning.“We estimate very small increases in GDP per capita and productivity, slightly improved public finances, slightly reduced pressures on the NHS, schools and on social housing, though slightly increased pressure on social care.

UK government needs to be clear about plans for lower-skilled work migration

“No perfect system exists and there are unavoidable, difficult trade-offs. The largest impacts will be in low-wage sectors and the government needs to be clear about its plans for lower-skilled work migration.“The government should ensure that the mistakes of previous UK points-based systems are not repeated.”The MAC report only represents a series of recommendations, which the government is not obliged to accept. Ministers will now digest the report before publishing a White Paper on a new immigration system in March.

What does the Senior Labour Market Adviser for the Chartered Institute of Personnel and Development think about the MAC report?

Responding to the report, Gerwyn Davies, Senior Labour Market Adviser, for the CIPD, the professional body for HR and people development, commented, “Today’s recommendations will provide some mild, temporary relief for many employers concerned about the new immigration system. Many will be relieved to see that the lower minimum salary threshold of £25,600 does not include sectoral or regional variations. This would have added complexity to a system many already feel daunted by."In addition, the expansion of a new unsponsored route, together with other proposed temporary routes, such as the Youth Mobility Scheme, will ease the cost and administrative burden for some employers. One the downside, other employers will be disappointed that the MAC has not supported lower salary thresholds for shortage occupations, especially public sector employers who have less scope to raise wages in response to labour shortages.Davies concluded, “With this in mind, employers will be keen to see the temporary one-year visa extended to two years when the Government makes its final policy announcement in spring. In the meantime, the important thing for employers is to get up to speed with the new system fast.”

Read the Migration Advisory Committee report in full  

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