Home secretary James Cleverly yesterday announced a “five-point plan” intended to reduce immigration in the UK and lessen the country’s dependence on overseas workers.
Overall, he said the plan – which looks to curb the number of workers’ dependants coming to the UK as well as increasing the minimum salaries that overseas workers must earn – would see around 300,000 people who came to the UK last year unable to come under the new rules.
Speaking in the Commons, Cleverly announced that, from next spring, the government would increase the earning threshold for overseas workers from its current level of £26,200 to £38,700 – nearly a 50 per cent rise.
The increased threshold means that, under the new plans, the median salary for full-time employees in a total of 13 sectors, including education, manufacturing and human health and social work, would not qualify for a visa, compared to the median salary of just one sector – accommodation and food service activities – which does not currently meet the minimum requirement (see graph).
The government will also end the 20 per cent going rate salary discount for shortage occupations, and will replace the shortage occupations list with a new immigration salary list. The Migration Advisory Committee will review the new list to reduce the number of occupations on the list. The government said the move would “crack down on cut-priced labour from overseas”.
Cleverly said: “It is clear that net migration remains far too high. By leaving the European Union we gained control over who can come to the UK, but far more must be done to bring those numbers down so British workers are not undercut and our public services put under less strain.
“My plan will deliver the biggest ever reduction in net migration and will mean around 300,000 people who came to the UK last year would not have been able to do so. I am taking decisive action to halt the drastic rise in our work visa routes and crack down on those who seek to take advantage of our hospitality.”
However, business groups and immigration experts have largely criticised the plans.
Chetal Patel, head of immigration at Bates Wells, told People Management the announcement would hit firms struggling with worker shortages: “This latest announcement will come as a blow for many organisations, SMEs in particular, which were already struggling to recruit foreign labour.”
She said many organisations were struggling to fill roles, and local talent was not providing enough to plug gaps left by European workers following Brexit, adding that businesses were struggling to upskill local labour. “This is a significant hike in minimum skilled worker salary requirements and many will undoubtedly be priced out of the market – they simply won’t be able to sponsor workers in critical roles,” Patel continued.
“I expect we’ll see a surge in sponsor licence applications again in a bid for skilled worker applications to then be submitted before the salary increases take effect. With increases in Home Office fees as well, more and more employers are implementing repayment policies with claw back tapering provisions to offset some of the fee increases.
“The jury’s out on whether this latest hardline approach on clamping down on net migration will work.”
Jonathan Beech, managing director of Migrate UK, said that a lack of clarity around the announcement has created confusion for businesses. “Unfortunately, it will mean a lot of advanced planning prior to the ‘spring’ changes – whenever that is – as some offers of employment for overseas workers would have been made without knowledge of the rate of pay increase. We hope that those who have been issued a certificate of sponsorship before the rule change will still benefit under the current rules,” he said.
“There will continue to be an increase in surveillance to ensure sponsors are compliant with the upcoming regulations and not circumventing the rules.”
Beech added that the announcement meant there would be “an anxious wait” for businesses as they wait for the Migration Advisory Committee to reassess the list of occupations that qualify for the new immigration salary list.
“For those overseas workers currently going through a selection process with a UK employer, it will mean communicating regularly to ensure that any time-bound rule changes do not affect them,” he continued.
“For those working in the UK under a graduate visa, there will be questions as to whether their employer can afford to pay them the new rate should they be sponsored in the future. Will the bar be set too high for them?”
Vikki Wiberg, senior counsel in the mobility team at Taylor Wessing, said the salary threshold increase “will take many more junior roles outside of sponsorship”, and the removal of the shortage occupations list will especially hit small businesses: “This change will have a significant impact on employers' ability to recruit in areas which, as the home secretary has recognised, there is already a shortage of staff.”
Neil Carberry, chief executive of the Recruitment & Employment Confederation, said the announcements were “wholly disproportionate, given that immigration for work in the private sector is such a small part of total immigration”.
“It is time for politicians to be more open about these trade-offs. Given the recent trend in wages, some uprating of the salary threshold would have been sensible – but such a large rise is likely to negatively affect smaller firms and those in regions farther from London,” he said.
“While many roles we have shortages in are driven by labour availability, the UK also has significant skills shortages. This news also underpins again the government’s serial failure to address the skills system despite half a decade of business feedback about the failed apprenticeship levy and the underfunding of further education.”