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Why a points-based system is not a good fit for the UK
11 July 2019
The idea of an “Australian-style points-based” immigration system crops up perennially in the UK debate, and this time it’s Boris Johnson’s turn to extol its virtues.
Johnson has recently called for the Migration Advisory Committee (MAC) to “look really properly” at the system for immigration to the UK. You’ll be forgiven if that sounds familiar: a points-based system was one of the key themes of the Leave campaign and was proposed by UKIP at the 2017 election.
But we’ve been here even before the 2016 referendum: Labour proposed a similar system in 2005 and then implemented it in 2008 – and the MAC has already investigated the model plenty of times. In a points-based system points are awarded for example for having English language skills, being of a certain age, being sponsored by a company or meeting a salary threshold.
Points-based systems are a useful way of attracting interest and provide an initial test of the eligibility of migrants but are a flawed way of managing immigration. The Australian government itself concluded that the system doesn’t work as hoped and has been regularly tweaking it ever since.
Employers have been critical as the system is not responsive enough to changes in demand in the labour market or their needs and can be cumbersome and bureaucratic to navigate, requiring businesses to sift through this pool of migrants which often leads to unemployment of highly skilled migrants as well as underemployment.
In Australia, some 13.5% of recently arrived immigrants who had applied from overseas under the points-based system were unemployed in 2013, while Britain’s failed experiment with Tier 1 visas led to 30% of the most skilled migrants working in low-skill occupations. Points-based systems tend to produce an oversupply of highly skilled workers, meaning a separate system to provide for the right levels of medium and lower skilled workers would still be needed.
The UK currently awards migrants points under the Tier 2 skilled worker visa, and it’s unclear how a proposed system would differ – but references to the Australian system could mean a substantial shift towards a much more open immigration set up with the main goal to boost immigration; Australia has around double the share of foreign-born residents of the UK.
Businesses would welcome this shift to a more open-minded approach to immigration as they have made clear that they have been struggling with increasing skills and labour gaps.
There are lots of ways to improve the current points-based system and make it work for both employers and employees, responding to their economic needs. Our #GlobalBritain report suggested three key areas for improvement.
Firstly, the current salary threshold of barring any immigrant who would earn under £30,000 needs to be lowered to around £20,000, in line with the London Living Wage and the proposed skills threshold. The current arbitrarily high figure excludes migrants such as nurses, web designers and civil engineers whose skills are in high demand.
Next, to attract and retain the best and brightest the government should bring back the two-year post-study work visa to ensure Britain can retain highly qualified migrants and profit from their skills.
Finally, the government should commit to reviewing business visitor visas to allow freelancers and other speciality skills to work in Britain on short contracts, while ensuring that the new temporary work route is designed in a way that it works for employees and employers and does not lead to less integration of migrants and possible exploitation.
Businesses are increasingly investing in training and homegrown talent to address the growing skills gaps, but it will never be enough to prevent the cliff-edge that Brexit – particularly a no-deal Brexit – poses to the UK labour market.
As we prepare to leave the EU it is vital that we put in place an immigration system that will continue to make the UK attractive to talent from around the world, as well as investing domestically to boost Britain’s skills, ensuring that the economy remains at #FullStrength.
Australia has given us many wonderful things, from Neighbours to Kylie and the Great Barrier Reef, but a points-based immigration system isn’t one of them.
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