“We intend to create a high wage, high-skill, high productivity economy”. UK Government 19/02/2020
The UK Government has today announced details of its plans for immigration reform leading up to the end of the Brexit transition period on 1 January 2021.
The new schemes are designed to ensure that the country continues to attract the talent and skills required to boost the economy whilst “taking back control” of the movement of people and reducing the flow of unskilled workers.
At the end of the transition period the UK will leave the EU Single Market and cross-border freedom of movement of people will no longer apply. The country is therefore free to set its own rules regarding the conditions of entry, stay, work and long-term residence of citizens from outside the British Common Travel Area. Under EU membership the “resident labour market” consisted of citizens of the United Kingdom and the European Economic Area. This arrangement ceases at the end of 2020.
The purpose of the new framework will be to ensure that the country remains open for business; attracting the skills and attributes needed by key sectors of the economy and regions of the country, whilst at the same time reducing overall migration numbers and boosting the skills and opportunities of local workers.
Meeting all of these objectives is a major policy challenge for ministers and their officials. Designing and implementing the legal and administrative architecture required to launch these changes by the end of the year is also a significant task for the Home Office.
The Government will shortly introduce an Immigration Bill to “bring in a firm and fair points-based system that will attract the high-skilled workers we need to contribute to our economy, our communities and our public services”.
A Phased Approach
Given the sharp deadline (the Government has written into law its commitment not to seek an extension of the transition period), the plan is to introduce a simple Points-Based System (PBS) on 1 January 2021 with further reforms being introduced at a later date in 2021. The Government describes today’s policy announcement as:
“.. part of a wider multi-year programme of change, led by the Home Office, to transform the operation of the border and immigration system”.
Under the new “simple”, employer-led PBS, migrants will score points for:
- A job offer at an appropriate skill level (set at RQF3)
- A job offer with an approved sponsor
- A salary offer of at least £25,600 per annum (this represents a reduction on the current requirement under Tier 2 (General) of a salary of at least £30,000)
- Proficiency in the English language
- Additional points for those with an “outstanding” educational background
The Government plans to suspend the cap on the number of people who can come on the skilled worker route (currently under the Tier 2 General Restricted Certificate of Sponsorship scheme) as well as remove the resident labour market test. Both of these decisions are welcome.
Points awarded for salary will be “tradeable” on a sliding scale, so that individuals with a salary of £23,040 will still be able to earn points for salary. Individuals earning £20,480 or more may still be eligible under the scheme through the acquisition of points in other areas.
70 points must be acquired overall. Three characteristics will be fixed, and the others tradeable as set out in the following table:
|Offer of job by approved sponsor||No||20|
|Job at appropriate skill level||No||20|
|Speaks English at required level||No||10|
|Salary of £20,480 (minimum) – £23,039||Yes||0|
|Salary of £23,040 – £25,999||Yes||10|
|Salary of £25,600 or above||Yes||20|
|Job in a shortage occupation (as designated by the MAC)||Yes||20|
|Education qualification: PhD in subject relevant to the job||Yes||10|
|Education qualification: PhD in a STEM subject relevant to the job||Yes||20|
Employers will still be required to pay sponsored migrants the appropriate rate for the role (as set out in the SOC codes). It will not be sufficient to pay the general salary threshold when the recognised standard rate is higher.
Applicants earning less than £25,600 will score extra points for working in a sector where there is a skills shortage. The Migration Advisory Committee (MAC) will be commissioned to produce a shortage occupation list covering all jobs encompassed by the skilled worker route and to keep the list under regular review.
Phase Two – Return of the Highly Skilled Migrant Programme?
From January 2021, the Global Talent route will open to EU citizens on the same basis as non-EU citizens: “the most highly-skilled, who can achieve the required level of points, will be able to enter the UK without a job offer if they are endorsed by a relevant and competent body.”
In the second phase, the Government intends to create a “broader unsponsored route” within the PBS to run alongside the employer-led system. Qualifying individuals will be able to come to the UK without a job offer. The document suggests that a cautious approach is being taken in the development of this route, presumably to maintain the integrity of their policy to “take back control” of immigration numbers:
“We will explore proposals for this additional route to the points-based system with stakeholders in the coming year”.
The document suggests that the route will be capped and carefully monitored during an implementation phase. Example characteristics for which points could be awarded include academic qualifications, age and relevant work experience.
Perhaps the most politically charged part of the policy document is the announcement that there will not be a route for “low-skilled” workers, even on a temporary or transitional basis:
“UK businesses will need to adapt and adjust to the end of free movement, and we will not seek to recreate the outcomes from free movement within the points-based system. As such, it is important that employers move away from a reliance on the UK’s immigration system as an alternative to investment in staff retention, productivity, and wider investment in technology and automation”.
This decision will cause concern for the care, construction and hospitality sectors that rely heavily on the free-flow of labour from Europe.
The document suggests that there will be sufficient labour in the UK from amongst the 3.2 million people who have already applied to remain under the EU Settlement Scheme, as well as non-EU citizens who come as dependents of skilled migrants. Stakeholders from the affected sectors are likely to make their opinions heard in the coming days.
Students from Europe will be covered by the points-based system in the same way as non-EU students. Applicants will be required to have an offer from an approved educational establishment, proficiency in English and evidence of financial resources.
Under the immigration rules and current points based system, there are a number of other immigration routes for specialist occupations and business-related activities including innovators, sportspeople, representatives of overseas businesses and ministers of religion. The Government’s “broad approach” for January 2021 will be to open these routes to EU citizens in the same way as they apply currently to non-EU citizens.
The document indicates that there will not be a revised route for self-employed people (although a new highly skilled migrant programme may go some way towards creating one). This will concern stakeholders frustrated by the inflexibility of the current innovator and start-up routes.
EU citizens will be treated as non-visa nationals, meaning they will be able to come to the UK as visitors for six months without the need to obtain a visa. They will also continue to benefit from entering the UK via the e-gates.
Costs and Levies
Employers will have to be mindful of the costs of engaging with the new PBS as it begins to apply to EU citizens as well as “rest of world” citizens. Visa applications will incur a fee. The Government will also levy the Immigration Skills Charge on employers and the Immigration Health Surcharge on the same basis as now. Cost implications for businesses are therefore significant.
Processing Time and Travel
The Government intends to open key routes from Autumn 2020, so that migrants can start to apply ahead of the system taking effect in January 2021. Employers who do not currently have a sponsor licence are encouraged to consider applying for one now, so that they are ready for the new system.
The intention is to create a streamlined system and to reduce processing times for sponsored migrants by up to eight weeks. Taking away the requirement of external advertising under a resident labour market test will go some way towards achieving this goal.
The Government intends to continue investing in online systems and biometric enrolment in order to create faster and more efficient services.
There is a great deal for employers and stakeholders to unpack in this new policy announcement. There is no doubt that immigration reform will remain one of the most important, and politically charged, areas of debate throughout 2020 as the country prepares to leave the Single Market.
Magrath Sheldrick LLP will continue to update clients and professional colleagues as the situation develops.
Join us on 2 March as we discuss these changes in the company of our friends at British American Business.