London’s status as a hub for global talent is being threatened by the Government’s ever-tightening immigration rules, according to a top UK business group.
The Migration Advisory Committee (MAC) has warned David Cameron that stricter rules for employing foreign workers from outside the EU will have detrimental impact on the UK’s capital city to attract international talent.
The group said: “Business requires a UK immigration system that is flexible and supports the recruitment of overseas talent, not a system that hinders this process.”
The MAC, an independent, non-departmental public body that advises the government on migration issues, was asked to consider new measures that would reduce migration to the UK from outside the European Economic Area (EEA) following the Conservatives’ election win in May. In particular, the Committee was asked to look at increasing the salary threshold for skilled foreign workers on Tier 2 visas.
The MAC was specifically asked to consider the impact of:
- Increasing the minimum salary thresholds for Tier 2 (General), Tier 2 (ICT) for the short-term and long-term categories to a level that better aligns with the salaries paid to highly-specialised experts or individuals filling skills shortages skilled to NQF Level 6 or higher.
- Increasing the Tier 2 minimum salaries for experienced workers per occupation.
- Increasing the Tier 2 minimum salaries for new entrant workers per occupation.
Following a consultation by London law firm Kingsley Napley LLP, the resulting report advised against such a rise, suggesting: “The government should ‘think twice’ before taking steps to increase thresholds, which currently stand at £20,800 per year for new hires and £41,500 for long-term, Tier 2 intra-company transfers.”
A further excerpt from the report, read: “There’s little doubt that an immediate implementation of a salary threshold at this level would receive strong opposition from employers. Additionally, it would lead to serious problems across many industry sectors.”
A second consultation, the results of which are to be released in December 2015, is currently underway and is expected to give a more detailed view. London First’s submission for this second consultation calls for the existing cap on the number of foreign workers to be ended and recommends leaving Tier 2 visa intra-company transfers uncapped, while keeping the current Tier 2 salary thresholds at the same level.
Referring to recent examples of businesses in the capital unable to obtain Tier 2 visas for graduates, London First said: “The Tier 2 visa cap is putting UK-based graduate initiatives at risk.
“Companies will be forced to relocate these initiatives, many of which are planned well in advance, outside of the UK should access to international graduates not be guaranteed. As a consequence, the positions of UK native graduates involved in these initiatives would be affected.”
Nick Rollason, head of immigration at Kingsley Napley, comments, “The concerns of business leaders regarding a local skills shortage have been widely reported. Many global businesses have the chance to base themselves here or abroad. It is time for the government to embrace Tier 2 and international skilled migrants rather than putting obstacles in their way.
“The numbers are small fry in the scheme of our immigration intake yet the economic benefits of this small pool of very high skilled people are clear,”
Non-EU skilled migrant labour accounts for a fraction of the UK’s incoming immigration (approximately 7.5 per cent) according to Office for National Statistics (ONS) figures. According to the Kingsley Napley report, companies that use such labour include:
- An engineering firm which relies on global talent because the UK produces insufficient numbers of home grown skilled engineers.
- An architecture firm which needs international individuals with country knowledge or language skills to service their many contracts and projects in China and elsewhere in Asia.
- A law firm which uses the Tier 2 scheme to bring in foreign (mostly US) qualified lawyers to advise UK based clients on non-English jurisdiction matters.
- A finance organisation which cut back on graduate recruitment during the recession and is now suffering a skills shortage at a certain level.
In fact 75 per cent of the companies Kingsley Napley surveyed indicated a restriction of the Tier 2 migration scheme would “highly” or “severely” impact their business.
One proposal the MAC is apparently considering is to restrict the Tier 2 route to highly specialised or shortage occupations. This would affect firms’ ability to train recent migrant graduates and for international firms to move junior staff around its global office network for career development, the report says.
With regard to the Government proposal to introduce an Immigration Skills Charge (ISC), payable by employers who sponsor migrant workers under Tier 2 and which would go towards apprenticeships and local upskilling schemes, Kingsley Napley called for a balanced and fair approach.
“This should take into account the significant commitment and investment some employers have already made to apprenticeships, internships, social mobility programmes and graduate schemes available to resident workers.
“In addition, employers should not have to pay both the Apprenticeships Levy (due to be rolled out in 2017) and the ISC-one should be offset against the other,” Nick Rollason says, adding, “The MAC has significant competing pressures to weigh. On the one hand, the government has set ambitious immigration targets for political and public opinion reasons.
“On the other hand the message from businesses is clear – internationally skilled migrants are vital to a thriving UK economy. We can only hope the MAC makes a sensible judgment call on this Tier 2 issue.”
Kingsley Napley’s submission to the MAC also deals with the issue of dependants of Tier 2 migrants and minimum salary levels.
Kingsley Napley interviewed over 30 Tier 2 sponsor clients and conducted a wider survey in compiling its submission from sectors spanning legal, oil & gas, engineering, pharmaceutical, digital & creative, architectural and financial services.
The Migration Advisory Committee, made up of a chair and 5 other independent economists, is responsible for providing transparent, independent and evidence-based advice to the government on migration issues.
