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Migration Advisory Committee publishes its key report considering the role of a points-based system and salary thresholds for the new immigration system

Summary:

MAC recommendations include lowering the minimum salary for skilled workers to £25,600

Date of Publication:
29 January 2020

Migration Advisory Committee publishes its key report considering the role of a points-based system and salary thresholds for the new immigration system

29 January 2020
EIN

As the UK leaves the EU and prepares to introduce a new immigration system, the Migration Advisory Committee (MAC) yesterday released its important report looking at the role of a points-based system and the appropriate level and design of salary thresholds.

CoverThe report is a hefty 278 pages long and you can download it here. A separate 103-page document of annexes is here. With this in mind, the Migration Observatory at the University of Oxford has produced a usefully concise overview of the key elements of MAC's report here.

The MAC report is split into two parts. The first covers a points-based system (PBS) and considers international experience with such systems, including from Australia, New Zealand, Canada and Austria.

"We make recommendations for a role of the PBS in the UK's future immigration system for a skilled worker route with a job offer, a skilled worker route without a job offer and for settlement," MAC says.

The second part of the report considers salary thresholds and summarises stakeholder views drawn from responses to MAC's Call for Evidence and an extensive programme of stakeholder engagement.

MAC recommends that the new immigration system should keep the current Tier 2 framework for skilled workers, saying that the combination of skill eligibility and a salary threshold works well for an employer-driven system. It also recommends, however, that the salary threshold should be reduced from £30,000 to £25,600.

The Migration Observatory's helpful summary states: "The MAC has recommended that most skilled workers should earn at least £25,600 to qualify for a long-term work visa, with lower rates for nurses, teachers, and various other health-sector workers. This is down from £30,000 under the current system for non-EU citizens.

"In addition to meeting these thresholds, workers would also need to meet an occupation-specific one, which in many cases will be higher. The occupation-specific rate would be set at a level that would exclude the 25% lowest-paid workers within each occupation – an approach unchanged from the current system for non-EU citizens.

"For young people under 26, both the general and the occupation-specific thresholds would be 30% lower than the thresholds for experienced workers. This means that in some occupations, young workers would need to earn only £17,920, as opposed to £20,800 in the current system. The MAC also recommends that they should be able to stay on this 'new entrant' rate for five years instead of the current three (though they may need much higher salaries to qualify for settlement after 5 years).

"The MAC recommends against having lower salaries for jobs on the 'shortage occupation list' – something that the government proposed in its 2018 white paper – and against regional variation in salary thresholds."

The BBC's Home affairs correspondent Dominic Casciani noted that MAC's Chair Alan Manning said the Government needs to be really clear with the public about what it wants from its repeated "soundbite" of an "Australian-style points-based-system".

MAC states in the report: "Defining a PBS is not as simple as it might seem. Using the broadest definition any selective migration system can be thought of as a PBS, because it could be presented as a system with points, though we would question the value of doing so purely as a cosmetic exercise. A narrower definition would only see a system with explicit points and trade-offs between characteristics and, therefore, a variety of ways of passing any 'test', as a PBS."

Denis Kierans, researcher at the Migration Observatory at the University of Oxford, said: "The MAC report does not exude enthusiasm for the 'Australian-style' points-based system that we have heard so much about over the past few months. It essentially says that the government needn't bother with a points system for people coming to the UK with a job offer and that the current system relying on employer sponsorship should work fine for these people. That said, the MAC does suggest that a points system could be useful for workers without a job offer or for people applying for settlement after a few years in the country."

Reuters reported that MAC said its report's recommendations would likely lead to a very small increase in GDP per capita and productivity, and slightly improved public finances. In addition, there would likely be a reduction in the future growth of the UK population and a slight easing in demands on the NHS, schools and housing, but there would be increased pressures on social care.

The BBC's Dominic Casciani added: "The MAC is absolutely clear that there is no such thing as a perfect immigration system - there will be losers and winners, trade-offs that favour one part of the economy over the other in pursuit of a policy goal. Under its recommendations, sectors like agriculture and hospitality will find it harder to bring in long-term migrants - but schools and hospitals could really benefit."

In response to the report, the Confederation of British Industry (CBI) welcomed the recommended reduction in the headline salary threshold, but warned it remains unclear how firms can hire for mid-skilled roles such as LGV drivers, joiners and lab technicians who don't meet the £25,600 test.

"Flexibility will be needed to build a system that lets wages rise where there are shortages while helping businesses to access the skills and labour needed to grow all parts of the UK," the CBI said.

According to Sky News, the Government said it would "carefully consider" the contents of the report.

Home Secretary Priti Patel was quoted as saying: "I think it's important to recognise that the British public voted for change when it comes to immigration and with that they have voted for an Australian-style points-based system."

The Guardian reported that Downing Street indicated it was unlikely to notably change course on its immigration plans as a result of the report.

Denis Kierans of the Migration Observatory said: "It wouldn't be surprising to see a new system introduced that is branded as 'Australian-style' but actually looks rather like the 'UK-style' system we already have for non-EU citizens."

The Home Office yesterday published an as yet sparse page at https://www.gov.uk/guidance/new-immigration-system-what-you-need-to-know that will be updated with the latest information about the new points-based immigration system as it becomes available.