Migration Advisory Committee Publishes Its Recommendations On Tier 2

The Migration Advisory Committee (“MAC”) is an independent body commissioned by the UK Government to advise on a number of potential changes to Tier 2 of the Points-Based System.

In its report, published today (19 January 2016), entitled “Review of Tier 2: Balancing migrant selectivity, investment in skills and impacts
on UK productivity and competitiveness“, the MAC has made the following recommendations:

  • The overall minimum salary threshold of Tier 2 should be raised to £30,000 for both Tier 2 (General) and short-term Tier 2 (Intra-Company Transfer) routes.
  • The overall minimum salary threshold for new entrants within Tier 2 (General) and for Graduate Trainees within the Tier 2 (Intra-Company Transfer) route, should be set at £23,000.
  • There is no need for regional variation in the salary thresholds.
  • The public sector may require time to move up to the new salary thresholds but should not be offered a permanent exemption from the higher thresholds. The thresholds for the public sector should gradually increase over time to reach the £30,000 threshold.
  • “Start-ups and creative occupations” may need to be considered for special treatment if they are likely to be disproportionately affected by the increase in salary thresholds.
  • An Immigration Skills Charge should be introduced, to act as a skills levy on firms using non-EEA workers. The MAC has recommended that the revenue accumulated from the Immigration Skills Charge should be used to train the domestic jobs market and thereby decrease the reliance on non-EEA labour.
  • The Immigration Skills Charge should be an upfront cost, payable at the time of the Certificate of Sponsorship application.
  • The charge should be regressive so that those employers hiring more highly paid migrants are penalised less in proportion to the salary paid.
  • An Immigration Skills Charge of £1,000 per year is large enough to raise a reasonable amount of revenue and to have a significant impact on employer behaviour.
  • The Immigration Skills Charge should be applied to both Tier 2 (General) and Tier 2 (Intra-company Transfer) routes.
  • “Graduate Trainee” and “Skills Transfer” routes within the Tier 2 (Intra-company Transfer) should be exempt from the Immigration Skills Charge.
  • The Tier 2 (Intra-Company Transfer) route for third-party contracting should be moved into a separate route and a higher salary threshold at £41,500 be applied.
  • Tier 2 (General) should not be restricted only to occupations on an expanded Shortage Occupation List.
  • There should be no automatic “sunsetting” of jobs on the Shortage Occupation List (in other words not placing an automatic limit on the length of time occupations can be classed as having shortages). Regular reviews of the Shortage Occupation List should be an effective mechanism for testing whether occupations are still in shortage. Industry will be required to submit more comprehensive evidence on what they are doing to resolve the shortage lest in order to be retained on the Shortage Occupation List.
  • The required amount of prior work experience with an employer in the Tier 2 (Intra-Company Transfer) route should increase from 12 months to 24 months, with the exception of the “Graduate Trainee” route and “Skills Transfer” route where the current requirements (6 months’ experience) should be maintained.
  • Certificate of Sponsorship application forms should include a description for why the intra-company transferee is required, and the specific skills they have.
  • The Home Office and HMRC should look into the issue of allowances and payment of national insurance contributions as this may be allowing undercutting.
  • All Tier 2 (Intra-Company Transfer) migrants should be required to pay the Immigration Healthcare surcharge.
  • There should not be an automatic restriction on the right of Tier 2 dependants to work in the UK.