How can the government tackle the UK’s labour shortages?

Following the introduction of the points-based immigration system, Samar Shams explains how the shortfall of workers in some roles and industries could be addressed

The UK’s labour shortages were a major issue in 2021, affecting employers across many sectors. The shortages were caused by Brexit and Covid-19, among other factors, and look set to continue in 2022.

The government could easily help many businesses by recognising labour shortages, making all roles in shortage eligible to be filled by sponsored, non-UK workers and reducing fees and hurdles within the sponsorship system for employers filling roles in shortage.

A missed opportunity to extend the Shortage Occupation List

New immigration rules for sponsored workers came into effect on 1 December 2020 to accommodate the end of free movement, allowing UK employers to sponsor non-UK workers for medium-skilled roles, in addition to the highly skilled roles previously eligible.

In September 2020, in advance of the new rules coming into effect, the Migration Advisory Committee (MAC) published recommendations on what jobs should be included on the Shortage Occupation List (SOL). 

Among the medium-skilled occupations and roles the MAC recommended for inclusion on the SOL are data analysts, business analysts, IT operations technicians, bricklayers and masons, vehicle technicians, mechanics, electricians, residential care managers, artists, authors, writers, skilled ballet and contemporary dancers who meet internationally recognised standards, and graphic designers.

Unfortunately, the government did not accept any of the MAC’s recommendations

New visa routes for limited roles

Instead of adding roles to the SOL, in October 2021, the government introduced visa routes for poultry workers and for heavy goods vehicle (HGV) drivers. 

The new routes were exceedingly narrow in terms of the roles for which they are available, the numbers of visas available and the duration of visa validity and did not attract much interest from applicants.

The low uptake of the temporary visas introduced for poultry workers and HGV drivers reflects that the UK must come to terms with its competitiveness in the global market for talent at all skill levels.

Challenges of sponsoring non-UK nationals

In relative terms, it is now more difficult to sponsor a non-UK national to work in a shortage occupation than it was before Brexit. This is exactly the kind of policy that we do not need.

The main advantage to be gained from inclusion on the shortage occupation list in the current immigration system is a reduced salary threshold for sponsored workers. 

Contrary to the MAC’s advice, the Home Office introduced a points calculation into the salary calculations for sponsored migrants. Where a job is on the SOL, a sponsoring employer is able to offer a salary 20 per cent lower than the ‘going rate’ for the role. The ‘going rate’ is set at the 25th percentile of salaries for each occupation. 

In today’s competitive market for talent, authorising employers to pay salaries 20 per cent lower than the going rate to candidates for shortage occupation roles is a vapid gesture.

The government abolished the Resident Labour Market Test so inclusion on the SOL no longer affords the advantage of an exemption from this Test. A lower visa application fee still applies.

Shortage occupation list – a ready tool to alleviate labour shortages

The SOL is a ready tool within the existing immigration framework that can be used to alleviate labour shortages quickly. The government should recognise the MAC’s SOL recommendations to include certain medium-skilled roles. The government should also commission the MAC to assess labour shortages amongst roles referred to as ‘low-skilled’. 

UK employers should be exempted from the Immigration Skills Charge (ISC) when sponsoring workers for roles on the SOL. It is a tax on UK employers sponsoring non-UK nationals to work in the UK.

It is crucial that workers being sponsored for roles in shortage be offered a route to settlement in the UK. The All Party Parliamentary Group (APPG) on Social Integration argued in 2017 for more settlement and citizenship opportunities citing better integration outcomes associated with higher rates of settlement and more positive attitudes towards migrants who have a stake in their communities. 

The Secretary of State has presented 62 Statements of Changes in the Immigration Rules over the past 10 years, some of which run to hundreds of pages. It is a national shame that, after all that fiddling, the UK’s Immigration Rules are so ineffective. If the government does not use available tools such as the SOL to remedy the situation quickly, we might all soon be citizens of nowhere.

Samar Shams is an immigration and global mobility partner at Spencer West