MAC recommendations - Tier 2 overhaul, revolutionary or recycling?

The Migration Advisory Committee has released an extensive report on the Points-Based System and Salary Thresholds. This was commissioned by the Government in July and September of last year.

If you’re wondering how the system might affect you, or your employees, then read on for a brief introduction to the new system as imagined by the MAC.

What might change?

The 278-page report advises against a full-scale ‘Australian-style’ points-based system. Instead, it recommends retaining the existing Tier 2 structure with an addition of lower skill-level jobs and a lower salary threshold from the current £30,000 per year.

• Foreign nationals hoping to come to the UK may now be able to do so without a job offer if they score high enough on the points system.
• The report recommends the existing tier 2 system remain in place, with a salary threshold, as a route for migrants with a job offer. They do however recommend that this route be expanded to include medium skilled workers.
• Potentially the threshold for migrants settling under the tier 2 route may be paused and the requirements for settlement reviewed to increase flexibility. This is due to concerns that required pay progression is too steep for settlement.
• There may be greater flexibility in the salary thresholds for those that come to the UK as full-time workers then transition to part time after having a child.
• Overhaul the Tier 1 Exceptional Talent route and re-design it is using a points-based system but add safeguards to prevent abuse.
• Introduce a separate pilot visa for ‘remote’ parts of the UK, which could include a lower salary threshold exemption.
• Review the Shortage Occupation List after the new immigration system is introduced

Factors like age, education, work experience and English language ability are likely to be taken into account. It is not yet clear how the government will weight each factor.

What about the income threshold?

Until now foreign workers looking to come to the UK to work must have a job offer paying more than £30,000. The Migration Advisory Committee (MAC) however has just recommended that this be dropped to £25,600 in order to boost recruitment of skilled NHS staff and teachers who are unlikely to meet the current threshold.

The current system is a complex mix of occupation specific thresholds relating to average earnings in a specific sector, worker experience, and a general threshold. The MAC indicated this could be profitably improved by having new entrant rates at 70% of the experienced rate, and using national pay scales to calculate thresholds in sectors like education and the NHS.

They also recommend that differences in average pay across regions should not be taken into account, with one threshold for the entirety of the UK, citing concerns that lower thresholds in certain parts of the UK risk ‘institutionalising’ some parts of the UK as ‘lower wage’, as well as adding unnecessary complexity.

While some stakeholders would prefer no threshold aside from the minimum wage, the MAC justifies the continued wage threshold by arguing that it prevents the undercutting of the labour market (i.e. employing migrants because they are cheaper than British nationals), ensures migrants are making net positive contributions and makes sure that policy supports the current government’s “ambition to make the UK a high wage, high skill, high productivity economy.

Concerns that sectors such as social care will still fail to meet this lower threshold and may suffer staffing shortages have been dismissed, claiming “the root cause of the problems there is the failure to offer competitive terms and conditions”.

We will watch with bated breath to see if these recommendations actually result in any material changes in immigration policy. As we have said  before, the introduction of the "Australian" points based system was never anything ground-breaking, so it will be interesting to see how the current government works to implement these MAC recommendations.

In the meantime, if you have any queries or concerns relating to your visa or the visas of your employees, you should contact us on 01403 801 801 or at [email protected] for a consultation.