Perspectives

GES NewsFlash

UK Immigration - Migration Advisory Committee publishes review of Tier 2 report

22 January 2016

Overview

The Migration Advisory Committee (MAC) has today published a report which makes a tranche of recommendations to the Tier 2 category of the Points Based System. In this brief note we aim to summarise their recommendations and will issue further commentary as to this shortly:

Immigration Skills Charge
  • An Immigration Skills Charge (ISC) should be introduced. The charge will incentivise employers to reduce their reliance on employing migrant workers and to invest in training and upskilling UK workers. The MAC modelled an upfront charge of £1,000 per worker per year, but recognised that the figure should be set by HM Treasury. Tier 2 (ICT) Skill Transfer and Graduate Trainee routes should be excluded from the charge.
Tier 2 General
  • All migrants switching to Tier 2 (General) in-country should be subject to the Resident Labour Market Test (RLMT) and included in an expanded Tier 2 limit.
  • There should be a rise in the minimum salary threshold for experienced staff to £30,000. For predominantly public sector occupations this rise should be phased, but the public sector should not be offered a permanent exemption from the increased thresholds.
  • The minimum salary threshold for new entrants should rise to £23,000. Graduates could be given additional points when the 20,700 limit is reached. For example, adding £7,000 (the difference between new entrants and experienced workers thresholds) when prioritising applications.
  • Tier 2 (General) should not be restricted only to occupations on an expanded Shortage Occupation List (SOL), instead the government should seek to reduce net migration by increasing salary thresholds required for Tier 2.
  • There should be no automatic sunsetting of jobs on the SOL: employers/industry should provide comprehensive evidence to confirm the measures they have taken to address the skills shortage in order for the role to remain on the list. Regular reviews of the SOL should be an effective mechanism for testing whether there is still a shortage.
Tier 2 Intra Company Transfer
  • All intra-company transferees should be required to pay the Immigration Healthcare Surcharge.
  • There should be a rise in the minimum salary threshold for Tier 2 (ICT) Short Term to £30,000.
  • The required amount of prior experience with the employer should increase from 12 months to two years, except for the graduate trainee and skills transfer routes where the current requirements (six months’ experience) should be maintained.
  • Certificate of Sponsorship application forms should include a description for why the intra-company transferee is required, and the specific skills they have to ensure the role is sufficiently specialist.
  • The Home Office and HMRC should look into allowances and whether the exemption of national insurance contributions should continue, as this may be allowing undercutting.
  • That use of the Tier 2 (ICT) route for third-party contracting (in particular to staff IT projects) be moved into a separate route and a higher salary threshold at £41,500 be applied to short term staff of this route to enable this to be used as a proxy for senior managers and specialists.
  • The government should commission a thorough review of skills shortages within the IT sector.
Dependants
  • Automatic work rights for dependents should not be restricted.

For the full report please visit https://www.gov.uk/government/publications/migration-advisory-committee-mac-review-tier-2-migration

Deloitte’s view

 

The latest MAC recommendations endeavour to make overall cuts of over 20% in the 151,000 Tier 2 visas issued, with a cut of nearly half in the IT sector alone. The report correctly recognises the contribution that skilled migrants make to the UK economy, however the suggested increases in the minimum salary requirements, Immigration Health Surcharge applicable to all Tier 2 migrants (previously only applicable to Tier 2 General) and the Immigration Skills Charge might just tip the scales when it comes to the competitiveness of the UK. Some positive recommendations as to Tier 2 (General) visas not being restricted to an expanded SOL and that dependants who accompany Tier 2 migrants should not face automatic working restrictions.

 

Interestingly there are proposed recommendations that hint to potential process changes. The suggestion that detailed description and confirmation of suitability for Tier 2 (ICT) roles are required, hints at the fact that Entry Clearance Officers may subjectively assess the business reasoning behind issuing CoSs when making entry clearance decisions. This would change the ethos behind the Points Based System, as currently sponsors are able to determine whether a migrant is required to fulfil a role themselves. The purpose of the Points Based System was to objectively assess a migrant’s suitability to work in the UK, the latest additions suggested by the MAC makes the test more subjective and reliant on the Home Office’s discretion.

 

We are analysing the report in its entirety and will be issuing further guidance shortly, but there is no denying, if all or even some of these changes are implemented, the system as we know it will see major changes!

Contacts

Jurga McCluskey
2 New Street Square, London, EC4A 3BZ
Partner, Head of Immigration
Phone: +44 20 7007 7668
Email: jmccluskey@deloitte.co.uk

Tsveta Bogdanova
2 New Street Square, London, EC4A 3BZ
Associate Director
Phone: +44 20 7007 2499
Email: tbogdanova@deloitte.co.uk

Anthony Michael
2 New Street Square, London, EC4A 3BZ
Associate Director
Phone: +44 20 7007 4370
Email: anthmichael@deloitte.co.uk

Sabina Ali
2 New Street Square, London, EC4A 3BZ
Associate Director
Phone: +44 20 7007 4151
Email:sabiali@deloitte.co.uk

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