The Migration Advisory Committee (MAC) released its long awaited report on the effects of EEA migration into the UK, which contains its recommendations for a post-Brexit immigration.

The MAC states that it would not be possible to implement its recommendations by the time the UK leaves the EU on 29 March 2019. Consequently, it agrees with the UK Government's current position that a transition period, during which EU nationals would effectively be able to continue exercising EU Free Movement rights, should be put in place even in the event of a no-deal Brexit. Any new system should therefore come into effect on 1 January 2021, which is when it is currently proposed that the transition period would come to an end.

The report runs to some 130 pages and its main conclusions are that:

  • EEA migrants have had negligible effects on employment opportunities, local services, pay, inflation and crime, but have increased pressure on housing demand resulting in price rises. EEA migrants pay more in taxes than they receive in benefits.
  • EEA migrants should not receive preferential treatment in any future immigration system nor should there be regional variations for pay.

On Tier 2 (General), which is the immigration category which allows highly skilled non-EEA nationals with a job offer from a UK company to work in the UK, the MAC has made the assumption that this category will continue to apply to non-EU nationals post-Brexit. Since the MAC recommends that EU nationals should not be given preferential treatment under any new immigration system, unless this is agreed as part of a comprehensive trade agreement, it has assumed that this category will be extended to EU nationals post-Brexit. As I have commented in a previous blog, in my view, this will place a huge burden on the Government and UK employers. The MAC appears to recognise this and has recommended that the following changes be made to this route:

  • The annual quota be abolished.
  • The Resident Labour Market Test, which currently requires UK employers to demonstrate, in certain circumstances, that there are no local workers who can fill the role that it wishes a non-EU migrant to undertake, be abolished or the number of exemptions increased - for example, roles paying over £50,000 should be exempt.
  • Medium skilled roles, that is those at RQF level 3, should be eligible for sponsorship.
  • The current salary threshold for the Tier 2 (General) category should be maintained at £30,000 for experienced workers or £20,800 for graduates.
  • The £1,000 per year Immigration Skills Charge should be applied to EEA migrants.
  • No changes should be made to the Tier 2 (Intra-Company Transfer) route, which allows international companies to transfer individuals from their overseas operations to the UK.
  • No immigration category should be brought in for low skilled workers, with the possible exception of a Seasonal Agricultural Workers scheme at a higher minimum wage. Interestingly, the UK Government has already announced that it plans shortly to introduce this scheme for non-EU nationals to address the shortage of workers to harvest fruit and vegetables in the UK.  The MAC has already acknowledged that this proposal will not be universally popular as it had a substantial volume of representations, particularly from hospitality and catering companies, stating that this sector will continue to require low skilled EU workers as there are insufficient local workers.
  • The Tier 5 (Youth Mobility) scheme, which allows 18-30 year olds from certain countries to come to the UK to work for up to two years, should be opened to EEA migrants. The MAC's view is that this this will ease the anticipated lower skilled labour shortage. The Government should also allow individuals under the Tier 5 route to switch in-country into the Tier 2 (General) category - currently this is not permitted.
  • No significant changes should be made to the Tier 1 immigration categories, which allow investors and entrepreneurs to enter the UK, apart from that they should be "better evaluated".

The report does not comment on how the UK immigration system should manage international students post-Brexit, or whether a new post-study work category should be brought in to allow international students who have graduated from a UK institution to remain in the UK  to work for a short period.  Recently, there have been calls from universities to reinstate the Tier 1 (Post Study Work) visa, which was abolished in April 2012, and had allowed graduates to work unrestricted for two years. 

The MAC has also not come up with proposals on how the large number of EU nationals who enter the UK as self-employed people or to establish small businesses will be catered for under a new system. The only immigration category which does allow self-employment is the Tier 1 route but the majority of these categories require applicants to make a substantial investment in the UK, while EU nationals can currently establish companies or work as self-employed without making any investment into their businesses. The MAC simply states that the workings of the Tier 1 routes are "unclear" to them and they cannot therefore provide any guidance.

If the MAC's recommendations were implemented in full, it would actually have the effect of rolling back a large number of the changes that have been made to the Tier 2 category by the current Government over the last 10 years, which have included increasing the minimum skill level for Tier 2 and introducing an annual quota for Tier 2 (General).

The Government has stated that it will "carefully consider the proposals" and, although in the past the Government has followed the MAC's recommendations, it will be a surprise if they agree with all of the MAC's proposals on this occasion.