The big MAC will be hard to swallow

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What did the Migration Advisory Committee says about future EU immigration policy?

 

This week saw the UK’s Migration Advisory Committee, (the MAC) publish their long awaited report on the impact of EEA migration in the UK, including a post-Brexit immigration system for EU workers. Employers will not have found it’s 132 pages happy reading – amongst its recommendations were that the UK should have one immigration system for all workers (whether they are from the EU or rest-of-the-world) and the minimum salary threshold should be set at £30k.

We all knew it was coming (the report that is) but not what it was going to say. There had been hints that the MAC would not favour any special treatment for EU workers, but there really is not much UK manufacturers will cheer about their recommendations.

One size fits all – whether you’re the Governor of the Bank of England or a welder. One salary floor, a compulsory skills charge (currently £1,000/year, with a Conservative pledge to double it) and a thick layer of red tape for employers to cut through before they could get their hands on an EU worker. The (limited) upside was:

  • a proposed review of the current sponsor system;
  • a proposed review of the skills charge (the MAC did point out that it’s actually just a charge with no obvious connection to skills); and
  • ditching the often pointless exercise requiring employers to advertise for candidates when they know there are none.

What the recommendations would mean is that any employer could bring in an EU worker, but the maths suggests, they would only do so at a higher skill and salary levels as the minimum salary would be £30k. Let’s say the employer plans to offer a worker a 3 year contract at £30,000 a year and gets an adviser to deal with the torture involved in the actual application process. Add roughly £5k in visa/application costs, £3k for the “skills” charge and 20% on-costs over the salary – the base costs would be around £44k minimum.

As the MAC point out, up to 63% of lower skilled workers don’t meet the £30k salary threshold (and there would be a huge regional variation in salaries), so it’s doubtful their employers could pay the £44k in the example above. Even for degree level workers, nearly 30% do not reach the £30k threshold.

 

What then, if the government accepts the MAC’s ideas, will this mean for manufacturers?


In short, less access to EU workers – particularly those with vital vocational qualifications which we short of, and where businesses do need EU workers the cost of employing them will rise.

 

Could anything change?

The MAC point out that all their recommendations are to be viewed in splendid isolation from the Brexit process – meaning that they cannot factor in the outcome to the continuing, UK/EU negotiation over a future relationship - the successor to UK membership. And an element of that future relationship may well be that the UK secures favourable access to the EU’s single market and a light-touch customs deal and grants EU workers some form of preferential access to work in the UK as a result.

So, the big MAC points to a future immigration system that businesses may find hard to swallow, and may not be to their taste – but the UK may yet decide that offering EU workers a better deal than the rest of the world has is a price worth paying to get the trade deal it wants.

All to play for.

Author

Director of Employment and Skills Policy

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