Number of firms registered as visa sponsors peaks as EU immigration hits 15-year low

28 Feb 2020 By Siobhan Palmer

But experts highlight this is only a small percentage of UK employers, urging more to familiarise themselves with the system now to avoid future skills shortages

The number of UK businesses registered as sponsors for Tier 2 work visas reached a record high in the last three months of 2019, with 28,734 companies on the Home Office register.

This is the highest number ever recorded by the Home Office, according to data released yesterday, overtaking the previous peak of 28,671 registrations in the third quarter of 2016 – the summer immediately following the Brexit referendum.

Chetal Patel, partner at law firm Bates Wells, said that with freedom of movement between the UK and the EU coming to an end at the beginning of 2021, when the government’s new points-based immigration system will come into effect, this upward trend was likely to continue. “Businesses will have to become wedded to the sponsor regime,” she said.

“Organisations have no choice but to get a sponsor licence if they want the privilege of employing overseas talent, including EU nationals,” Patel explained. “With the notable absence of a low-skilled route, many businesses are likely to be hit with critical workforce shortages. We may find ourselves facing an employment vacuum in this area.”

Patel added that the new points-based system could prove a “logistical nightmare” for sectors traditionally employing large numbers of EU nationals.

Jonathan Beech, managing director of Migrate UK, agreed Brexit was undoubtedly the cause of an increase in sponsorship registrations. “The increase in the number of UK businesses applying for a sponsor licence in the UK started before the [new points-based system] policy announcement, as it became clearer that Brexit was finally going to happen,” he said.

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Employers intending to hire EEA citizens into medium- and high-skilled jobs from January should consider applying for a sponsor licence, Beech advised, noting “employers need to make themselves attractive to new EEA employees by having a licence in place”.

However, Madeleine Sumption, director of the Migration Observatory at the University of Oxford, highlighted that while the number of employers with a sponsor licence had increased, they still only made up a small percentage of UK employers. She added that many of the employers now applying for a license will have had “very little experience of the current system and don’t yet know what it requires – both in terms of costs and time commitment. 

“That’s particularly the case for small businesses, which often struggle to keep up with administrative requirements of the immigration system,” she said.

Separate official figures, also released yesterday, showed the number of EU citizens coming to the UK for work has fallen to the lowest level since 2004, driving an overall fall in immigration for work since 2016.

Just 79,000 EU citizens arrived for work in the UK in the year to September 2019, down from a peak of 190,000 in the year 2015/16 – the year prior to the Brexit referendum.

However, the ONS noted that while net migration from the EU to the UK had fallen since 2016, more EU nationals were still arriving than leaving.

Conversely, migration to the UK from countries outside of the EU is at its highest level since 2004. In the year ending September 2019, 78,000 non-EU citizens came to the UK to work with a definite job offer, which the ONS said was an all-time high.

Sophie Wingfield, head of policy and public affairs at the Recruitment and Employment Confederation (REC), said the figures reinforced concerns from employers about the availability of labour under the new immigration system.

“More businesses are looking to hire staff since the election, and 71 per cent of them have little or no spare capacity in their workforce,” Wingfield said. “The major challenge is that not enough people are available to fill these roles. The fact that we now have the fewest EU citizens arriving to work in the UK since 2004 will only make this problem worse.”

Wingfield called on the government to amend the new system to allow more EU workers to come to the UK on lower salaries, including by introducing a temporary work visa open to all pay grades and skill levels.

According to national statistics, there were an estimated 2.31 million EU nationals and an estimated 1.34 million non-EU nationals working in the UK in the final quarter of 2019.

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