Potential Impact Of White Paper – Exposure Of Full-time Jobs To New / Increased Global Recruitment


Employment, European Union, Policy, Visas/Work Permits

Summary:
Depending on the primary salary threshold for skilled workers that is finally implemented as part of the post-Brexit immigration system, between 6.2 million and up to 8.8 million full-time jobs held by UK-born employees would be exposed to the potential for new or much increased global recruitment. This is based on analysis of the number of full-time jobs held by UK-born employees (in each salary band and distinguished by skill level), according to the Labour Force Survey – for a summary, see figure 1 below.

The key current criteria for the Tier 2 (General) route are as follows:
a)
The primary salary threshold for skilled migrant workers coming under the Tier 2 (General) route is currently set at £30,000 for experienced workers. However, labour market entrants are only required to earn around £21,000, and there are also exemptions from the main salary threshold for certain public sector workers such as healthcare staff and secondary teachers.
b) There is a minimum skills threshold in place, which means that all roles being filled via this route, including those on the Shortage Occupation List, must be skilled to Regular Qualifications Framework Level 6 or above (graduate level or above).
c) The number of skilled workers who can come via this route is also constrained by an annual cap of 20,700 work permits issued per year. However, it is important to note that doctors and nurses are excluded from the cap and that some roles, such as those on the shortage occupation list or PhD skilled roles, are given priority under the cap. This means that only around half of all applications by employers between October 2017 and September 2018 were constrained by the annual cap (p.140 of Immigration White Paper).

The Immigration White Paper, published on 19 December 2019, proposed both removing the annual Tier 2 work permit cap, abolishing the obligation on employers to carry out a resident labour market test (RLMT) as a condition of sponsoring a worker and diluting the skills threshold for Tier 2 visas from graduate level to A-level. The latter change would mean that jobs such as IT support worker, marketing assistant and housing officer would newly come under Tier 2.

The Migration Advisory Committee have recommended that the post-Brexit immigration system include a primary Tier 2 (General) salary threshold set at the level of £30,000 per year. However, there is some reason to believe that the threshold will be set at a lower level following year-long consultation period that will follow passage of the Immigration and Social Security Co-ordination (EU Withdrawal) Bill now proceeding through Parliament. Both Philip Hammond and Greg Clark expect lobbying from employers to exert significant downward pressure on the threshold. One cabinet figure is reported by the Guardian to have said that the eventual threshold is, “likely to be closer to £21,000 than £30,000”. The article adds that rebellious ministers believe Theresa May will be forced to allow workers earning as little as £21,000 to enter the UK after Brexit. For this reason, we have included three scenarios in considering the potential exposure of UK jobs under these proposals – one at the £30,000 level, one at the £25,000 level and one at the £21,000 level.

Impact of removal of the cap and RLMT on four million highly-skilled jobs already exposed to global recruitment via Tier 2 (General)

The current number of full-time jobs held by UK-bon workers which are exposed to global recruitment via the Tier 2 (General) route is just over four million (the green segment of the left-hand most column of Fig. 1 below). Under the White Paper proposals, such jobs would be opened to an increased level of global recruitment. It is likely that the specific proposal to remove the cap of 20,700 of Tier 2 (General) places would have this effect. Some might argue that the effect of such a change would be limited given the fact that the Tier 2 cap was not reached during the first seven years of its operation (2011-2017). However, the removal of the cap must be seen alongside other proposals in the White Paper that would have the effect of significantly reducing administrative requirements places upon employers, as well as the proposal to abolish the RLMT. The White Paper (on p.16) points to the government’s commitment to ‘minimise the time it takes to hire a skilled migrant and aim to process the vast majority of work visas within two to three weeks’. It is likely that these changes would only increase employers’ propensity to turn abroad for recruitment, even if the proposals to dilute the skills threshold and lower the salary threshold were not implemented.

Impact of primary salary threshold being set at £30,000: a total of 6.2 million jobs opened to new or increased levels of global recruitment
The Migration Advisory Committee (MAC) recommended retaining the primary Tier 2 salary level at £30,000 (since this is the level of household income at which an average family of EEA migrants starts making a positive contribution to public finances). In such a scenario up to 6.2 million jobs would be exposed to new or increased recruitment from around the world. As Figure 1 below illustrates, the 6.2 million figure comprises:
1A) 4 million highly-skilled jobs earning £30,000 or more per annumThese are already open to UK/EU nationals and to non-EU nationals who meet the criteria although constrained by the Tier 2 cap), and to certain non-EU nationals who are here on other visas (e.g. spousal visas, refugees, Tier 5 youth mobility, dependants).
1B) 2.2 million medium-skilled jobs earning £30,000 or more per annum. These are currently open only to UK / EU nationals and certain non-EU nationals who are here on other visas (e.g. spousal visas, refugees, Tier 5 youth mobility, dependants). Non-EU nationals cannot come to the UK to fill such jobs via the current Tier 2 (General) route.

Impact of primary salary threshold being set at £25,000: a total of 7.7 million jobs opened to new or increased levels of global recruitment
If the primary salary threshold was set at £25,000, 7.7 million jobs would be exposed to new or increased global recruitment. As Figure 1 below illustrates, this figure comprises 1(A) and (B) plus:
2(C) 1.5 million highly and medium-skilled jobs earning between £25,000 and £30,000 per year. The highly-skilled jobs within this range are currently only open to UK/EU workers, to new labour market entrants from outside the EU (the latter constrained by the Tier 2 cap), to those who fall within the range of exemptions mentioned in paragraph 1 above and to certain non-EU nationals who are here on other visas (spousal visas, refugees, Tier 5 youth mobility, dependants). The medium-skilled jobs within this range are currently only open to UK/EU workers and to certain non-EU nationals who are here on other visas (spousal visas, Tier 5 youth mobility, refugees, dependants).

Impact of primary salary threshold being set at £21,000: a total of 8.8 million jobs opened to new or increased levels of global recruitment:
The Tier 2 (General) salary threshold is currently set at £20,800 only for new labour market entrants but £30,000 for experienced workers. £21,000 is a very low level for the primary Tier 2 salary threshold to be set – it is just over the current “Living Wage” for London (currently £9.50 per hour, or £19,000 per year). If the primary salary threshold were to be set at this level, up to 8.8 million full-time jobs held by UK-born workers would be exposed to new or increased recruitment from around the world.

As Figure 1 below illustrates, the 8.8 million figure comprises 1(A) and (B) and 2(C) above (totalling 7.7 million jobs) plus 3(D): an extra 1.1 million highly-skilled and medium-skilled jobs earning between £21,000-£30,000 per year. Just under half of this cohort of jobs are highly skilled and currently are only open to UK/EU workers, to certain non-EU nationals who are here on other visas (spousal visas, refugees, Tier 5 youth mobility, dependants) and to new labour market entrants from outside the EU (as well as those subject to the various exemptions mentioned in paragraph 6 above). Just over half of this cohort are medium skilled jobs which are currently only open to UK / EU nationals and certain non-EU nationals who are here on other visas (spousal visas, Tier 5 youth mobility, refugees, dependants).

As for the five million (mostly low-skilled) jobs which currently earn less than £20,800 per year, these can only currently be filled by UK / EU nationals and certain non-EU nationals who are here on other visas (spousal visas, Tier 5 youth mobility, refugees, dependants). Unless the post-Brexit immigration system departs significantly from what has been proposed in the White Paper, it is not envisaged that skilled non-EU (or EU) nationals will in future be able to fill such jobs via the Tier 2 (General) route. However, such jobs may be in scope of a new temporary route for up to a year to ‘low risk’ nationalities and also in scope of the possible expansion of the youth mobility scheme to encompass the EU27 (both listed as proposals in the White Paper).

The bars in Figure 1 below indicate the number of full-time jobs held by UK-born employees in each salary band and the colours distinguish them by skill level.

Figure 1: UK full-time employees by skill level[1]/salary, LFS, Quarter 2, 2018.

 

13th March 2019

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