Business calls for immigration overhaul to drive post-Brexit prosperity

Business leaders today unveiled a new pro-growth immigration approach to ensure the UK can access the people and skills it needs from around the globe.

In a new report with PwC, London First, the business campaign group, is calling for an overhaul of the current system, including: 

• scrapping the net migration target; 
• a shake-up of the existing skilled visa route (Tier 2) to ensure people arriving into the UK have a confirmed job;
• re-setting the salary threshold from the current £30,000 to the level of the London Living Wage (£20,155) to open up this route to a broader range of skills; 
• a review of the shortage occupation list to better align it with economic need, including the UK’s Industrial Strategy; and 
• creating a new independent ​‘Office for Migration Responsibility’ which would also ensure more accurate data on the numbers of people coming in and out of the country. 

This will go alongside action to upskill UK workers, including business-led investment in apprenticeships, T-levels and training. 

With almost a fifth of the UK’s workforce originally coming from outside the country¹, immigration powers the economy, across all sectors and at all skills levels. In the capital around 1.8m working people were born overseas, together contributing a net additional £83bn² – more than enough to cover the UK’s housing and transport budgets³. 

Jasmine Whitbread, chief executive of London First, said: 

“To ensure post-Brexit Britain continues to thrive we need to be rolling out the welcome mat to global talent, not slamming the door shut. 

“The rhetoric around immigration is getting in the way of hard facts – the UK’s economic success is built on the talents of the people who live and work here, across all sectors and at all skills levels. With one in three Londoners born outside the UK, we should be celebrating the contribution immigration makes in enriching our capital. 

“That’s why we’re calling for a new streamlined immigration system, based on salary and the skills the economy needs, which is overseen by a new independent body to ensure public confidence. 

“If we don’t get this right, we run the risk of putting critical sectors and public services in jeopardy with too few people to do the job.”

‘Global Britain: A fair and managed immigration system fit for the post-Brexit economy’ follows analysis of comparable immigration systems around the world and input from over 200 of London’s leading employers. 

The report examines three key areas for action: reform of the Tier 2 visa route, the Shortage Occupation List and how to ensure the right controls and data. 

Reform of the Tier 2 visa route 

The existing Tier 2 system – currently designed to allow employers to recruit ​‘high-skilled’ workers from beyond the EU with a salary of £30,000 and above should be reformed: 

• Resetting the salary threshold to £20,155 – where the London Living Wage is – to open it up to a broader range of skills, prevent a sudden cliff-edge in recruitment and allow employers time to adjust.

• All workers to have a confirmed job offer and qualifications equivalent to ​‘A’ levels or a higher apprenticeship before moving to the UK. 

• The salary threshold could be raised over time as businesses continue to invest in both training and technology to improve productivity and reduce the UK’s dependence on unskilled labour from abroad. 

A strategic approach to shortage occupations 

Currently the Shortage Occupation List (SOL) allows employers to hire people from overseas who meet identified skills shortages, such as nurses, engineers and social workers. The UK’s Shortage Occupation List is set out by the Migration Advisory Committee and due to be updated next year, after five years since the last review. 

• An annual review of which sectors and occupations should feature on the list to make it more responsive to the economy’s needs.

• Alignment to sectors identified in the Government’s long-term Industrial Strategy where the UK wants to grow, such as Artificial Intelligence, automative technologies, construction and life sciences⁴.

• People who offer skills in these areas should be exempt from a Resident Labour Market Test and fast-tracked through the application system. 

• The Shortage Occupation List will work alongside the new salary threshold to ensure strategic labour needs are met in the long term, particularly as the salary threshold starts to rise over time. 

Seasonal and short-term visa schemes for specific sectors, such as hospitality, food and retail, should also be established. 

In addition to the two routes into the UK via salary and shortage occupation list, an exceptional talent route for small numbers of high-value entrepreneurs, innovators and creative talent would provide a third route into the UK.

Enforcing the right controls and introducing accurate data 

Ending freedom of movement from the EU will result in significantly more people, and applications, being handled by the Home Office. The current system is in need of reform: 

• The Government must commit to cutting red tape and a phased programme to digitise the UK immigration system, underpinned by accurate, real time data.

• In parallel, a Resident Labour Market test would be applied to prioritise UK workers with a ​‘Swiss-style’ emergency brake introduced for occupations where UK unemployment is 8% or higher.

• The Migration Advisory Committee to be given statutory powers to help deliver a post-Brexit immigration system that works for the UK, similar to the Office for Budget Responsibility. Becoming a new Office for Migration Responsibility, it would draw on input from Government departments and businesses to provide an ongoing, evidence-led review of migration in the UK and its role in our economy.

The report warns that with the UK economy at near-full employment and many firms experiencing skills shortages, it is critical to avoid a cliff edge in access to workers from overseas, with time for employers to adjust to new rules around hiring lower-skilled EU workers. Meanwhile, businesses will continue to invest in training and technology, to help plug future skills gaps.

A full copy ​‘Global Britain: A fair and managed immigration system fit for the post-Brexit economy’ is available here.

Commenting on the report, Danny Mortimer, chief executive of NHS Employers and co-convenor of the Cavendish Coalition, said: 

“We welcome this timely report from London First and PricewaterhouseCoopers. This is a crucial moment for the health and wealth of the UK and the report contributes pragmatic ideas and suggestions around our labour market that could work not only for business but also for the health and social care sector.

“In England, there are more than 40,000 nurse vacancies and nearly 80,000 care worker vacancies. As demand for services continues to grow, we know we will need to keep the doors open to talented workers from outside the UK, while redoubling efforts to attract and retain more of the best and brightest from the UK into health and social care roles.

“It would be irresponsible for the government to bring the shutters down overnight, especially to those in important lower wage roles such as care workers, or to others performing vital services to the public but who are earning less than £30,000 a year, such as nurses. 

“In looking at creating a new immigration system, the report helpfully suggests how the shortage occupation list could be used differently to meet the needs of employers while not compromising opportunity for UK workers, and also rightly challenges the government to consider using other indicators to set a salary threshold.

“In advance of a white paper on immigration, this report provides a valuable starting point for the government to engage with employers across all sectors.” 

Notes to editors:

¹ ONS: ​‘UK and non-UK people in the labour market: August 2018’.

² London First and PwC: ​‘Facing Facts: The impact of migrants on London, its workforce and its economy’.

³ Annual Government spending on transport (£37bn) and housing and environment (£32bn). HMT Budget 2018

⁴ The Government’s Industrial Strategy has identified sector deals for: life sciences; automotive; creative industries; AI; construction; and nuclear.