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Companies react to MAC’s ‘Statement of Intent’

Yesterday, the ‘Statement of Intent’ by the Migration Advisory Committee on Tier 2 Immigration was released. Johnathan Beech, managing director of Migrate UK, Neil Carberry, CBI director for employment and skills, Ilda de Sousa, Kingsley Napley’s immigration law partner and Tom Hadley, the Recruitment and Employment Confederation’s director of policy, have all commented on the Statement, which aims to limit the UK's reliance on non-EU sponsored workers under Tier 2 of the Points Based System.


Beech said, "The Migration Advisory Committee's (MAC's) ‘Review of Tier 2’ to limit the number of non-EU workers in the UK is the largest proposed change to sponsored employees in over five years and will be detrimental to many UK businesses who rely increasingly on the skills of an overseas workforce.


"The Home Office has already shut down numerous routes for non-EU migrants entering or remaining in the UK for work. In 2011 it closed the Highly Skilled Migrant route and the Post Study Work route which allowed employment and self-employment, and dramatically changed who qualifies as a ‘sponsored worker.'


"These latest set of MAC proposals to be considered by the Government before being enforced on 6 April, will leave many companies, already facing a growing skills crisis, struggling to afford the rise in labour and administration costs and resorting to using lower skilled workers.


"Significantly, proposals include raising minimum salaries for Tier 2 Intra-company transfers (ICT's) and Tier 2 General employees; to impose an Immigration Skills Charge (ISC) of an extra £1,000 per Tier 2 migrant per year; and to introduce an NHS Surcharge for ICT’s.


"MAC is also suggesting that Tier 2 ICT’s have at least two years of company experience overseas before qualifying for a transfer, up from one year currently, and further administration burden with a proposal for more detailed job descriptions for Tier 2 ICT applications including skill requirements.


"A new Tier 2 ICT route for third-party contracting which includes raising the minimum earnings threshold to £41,500, will especially hit those hard that rely on overseas contracts, particularly the IT industry. Further, MAC is calling for a more in-depth review of skills shortages within the IT industry. They may recommend the use of the Resident Labour Market Test (RLMT) to third-party contacting route and limit the proportion of Tier 2 migrants to each organisation, which will significantly damage to the future talent available to UK tech organisations unless managed carefully.  


"It seems short-sighted to limit one of the only groups that can be controlled yet is so greatly relied upon especially as latest ONS figures for the year ending June 2015 show that the amount of non-EU citizens entering the UK actually accounts for less of the overall net migration.


"Unlike EU workers, who can move freely between EU countries under European law, unless intra-company transfers; jobs have to be advertised to settled workers first before offering them to non-EU professionals and sponsored workers have to be in the UK for five consecutive years and have Indefinite Leave to Remain (ILR) before they can settle or claim public funds or benefits. The number of sponsored workers who can qualify for ILR has been cut dramatically since 2010.


"I would advise companies that rely on non-EU workers, that they should advertise jobs locally and submit sponsorship applications soon before changes are enforced on 6th April. Licence renewals are expected to be more complex so forecasting vacancies and planning financially can help for applications, should skills not be found within the UK.  Finally, compliance checks will likely increase so I would also advise companies to review their record-keeping to ensure it complies with the Prevention of Illegal Working checks and Sponsor Duties for licence holders."


Carberry commented, “The MAC rightly recognises that in a global economy, skilled migrants are important to addressing UK skills shortages and to attracting investment. At the same time, it’s critical to invest in our own skills system and to manage the impact of migration on public services.


“However the MAC’s recommendations to increase migration visa costs and salary requirements could hold back firms’ ability to grow and create jobs, particularly for exporting, medium-sized businesses.


“They would increase the cost of hiring skilled workers at a time when businesses are already having to manage government policies like the apprenticeship levy.”


de Sousa said, “It’s all very well for MAC to say the skills levy is a win-win that will raise money to help train British workers. This is pie-in-the-sky thinking. The reality is that businesses will have to make cost cuts elsewhere to compensate for the skills surcharge. So jobs may be on the line as a result of such a measure.  That is what our business and City clients are telling us. “


Hadley commented, “The suggested raise in the minimum salary threshold to £30,000 will only exacerbate the skills shortage crisis. By limiting access to workers at a time of record employment in the UK, the government would make it more difficult for businesses to grow and keep ahead of foreign competitors, and our hospitals and schools would come under more pressure to maintain staffing levels. The MAC has admitted in their report that the professions most likely to be affected are nurses and school teachers.


“The MAC is suggesting that raising the cost of recruiting a Tier 2 migrant will reduce demand for candidates. We completely disagree with this. A huge range of industries have conducted research into the lack of available candidates with the necessary skillset and there is absolute consensus that the UK is suffering skills shortages in a vast range of sectors. The demand for candidates from outside the EEA will only increase over the coming years.

“However, there are some positives in today’s report - particularly with regards to ensuring that shortage occupations do not have an arbitrary time limit placed on them.”


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