Industry responds to Patel's new points-based immigration system

Home secretary Priti Patel is today launching a new points-based immigration system for the UK, in a move that seeks to put to an end the reliance on cheap, low-skilled labour coming into the country, and ceasing free movement from 1st January 2021.

The new system will assign points for specific skills, qualifications, salaries or professions and visas will only be awarded to those who gain enough points. It will give priority to scientists, engineers and academics. Skilled workers will need to meet a number of relevant criteria, including the ability to speak English.

"All applicants will be required to have a job offer and, in line with the Migration Advisory Committee’s recommendations, the minimum salary threshold will be set at £25,600," Patel confirmed. "The new points-based system will also expand the skills threshold for skilled workers. Those looking to live and work in the UK will now need to be qualified up to A level or equivalent, rather than degree level under the current system. This will provide greater flexibility and ensure UK business has access to a wide pool of skilled workers."

"In line with the government’s manifesto commitment there will be no specific route for low-skilled workers. It is estimated 70% of the existing EU workforce would not meet the requirements of the skilled worker route, which will help to bring overall numbers down in future."

Skills, labour supply and competitiveness

A number of aspects of the new system will be welcomed by businesses, as CBI director-general, Carolyn Fairbairn pointed out -- particularly abolishing the cap on skilled visas, introducing a new post-study work visa for overseas students, and reducing the minimum salary threshold from £30,000.

Nonetheless, the business group chief warned that careful implementation of the new rules across all UK nations and regions will be required for the new system to be a success for businesses.

"A regularly reviewed shortage occupations list, with promises of further flexibility, will be vital for the effectiveness of the new system. Above all, the government must work with employers and employees -- especially smaller firms -- to ensure they have the time to adapt to new policies and practices," Fairbairn explained.

“Firms recognise and accept that freedom of movement is ending, and have sought a system that is both open and controlled, valuing people’s contribution beyond their salary while retaining public confidence.

“Nonetheless, in some sectors firms will be left wondering how they will recruit the people needed to run their businesses. With already low unemployment, firms in care, construction, hospitality, food and drink could be most affected."

Immigration specialist and partner at city law firm, DMH Stallard, Adam Williams anticipates a similarly mixed response among businesses.

"For some businesses the proposals will actually be positive news in terms of recruitment options," he explained. "The (effectively) A-level skill requirement is lower than the current rules (which require roles to be at ‘graduate level’ or above), and the headline minimum pay threshold is reducing from £30,000 to £25,600. This coupled, with a removal (which is technically referred to as a suspension) of the cap on overall numbers and the requirement to carry out an advertising process to show it is necessary to recruit from abroad, will actually open up the system to many."

At the same time, Williams warned that the clock may be ticking for other businesses. "The warning signs for lower skilled/lower paid work have been there for a while. Even during Theresa May’s premiership I recall Home Office officials speaking of the government’s desire to 'wean' British business off its reliance on foreign labour to fill these roles, he explained. "Many organisations will be understandably concerned. There is no apparent route from 2021 for ‘demand driven’ recruitment of foreign nationals in to roles than do not require A-level qualifications or higher, and with a historically low unemployment rate of just 3.8% published yesterday (18th February) it is hard to see how the domestic labour work force can bridge the skills gap.

"The policy statement refers to the 3.2 million applications made by EEA nationals under the EU settlement scheme (enabling them to stay beyond 2021) as providing 'flexibility to meet labour market demands' but the vast majority of those are likely to already be in work in the UK.

"Absent from the policy statement is any mention of the system being 'Australian-style'. This makes sense, in that the proposed system goes nowhere near as far in terms of its scope. In the Australian system, economic migrants can enter and settle without a job offer, if they can show enough points from a variety of different options (eg. abilities, qualifications, age etc.). The government’s proposals mandate a job offer, and the ability to 'trade points' is limited to reducing the minimum pay threshold slightly for those who can show they are highly skilled or coming to fill a 'shortage occupation'.

The Home Office confirmed that EU citizens and other non-visa nationals will not require a visa to enter the UK when visiting the UK for up to 6 months; and that the use of national identity cards will be phased out for travel to the UK.

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