BFPG Explains: Immigration

Flora Holmes explains the UK government’s new immigration policy, its projected economic impacts, and what it means for prospective migrants to the UK.

What is the government’s new immigration plan?

Workers from the European Economic Area (EEA) countries currently have the automatic right to live and work in the UK irrespective of their salary or skill level. This ended on the 31st December 2020, when the post-Brexit transition period finished. Under the government’s new immigration policy, EU and non-EU citizens are treated equally, prioritising ‘high-skilled’ workers.

Potential migrants are allocated points based on a number of factors: whether they have a job offer (20 points), whether they speak English (10 points), whether they have a PhD in a STEM subject (20 points), and whether they have a job offer in a shortage industry (20 points). Migrants need 70 points to come to the UK, including a job offer from an approved employer at an appropriate skill level. There is a salary threshold of £25,600, which can be lowered to £20,480 for shortage occupations.

What is a skilled worker?

The definition of skilled workers was expanded to include those educated to A-Level/Scottish Highers-equivalent standard. Waiting tables and certain types of farm work were removed from the skilled category, while carpentry, plastering and childminding were added.

Are there any exceptions?

A ‘global talent scheme’ allows highly skilled scientists and researchers to come to the UK without a job offer. Students may come to study if they have an offer, can demonstrate English, and have funds to support themselves; a graduate route allows up to two years’ work after graduation.

How does the system compare with other countries?

The Australian points-based model has been hailed as the inspiration, but there are crucial differences: in Australia a job offer is not a requirement, and points are awarded for age, qualifications and experience. Canada and New Zealand also have points-based systems based on language, education, skills and experience.

What are the economic impacts?

Academics studying migration suggest the impact on unskilled immigration from the EU is limited, as net EU migration is already close to zero. Other analysts warn the proposals will make recruitment harder and disproportionately affect women, who are more concentrated in low-paid occupations. The Migration Advisory Committee suggests a salary threshold helps prevent undercutting in the labour market.

Which sectors will be most affected?

Business leaders have warned of pressures for the care system, farming, construction and hospitality, which rely on EU workers paid below the salary threshold and have not been designated shortage occupations. The government has said the seasonal agricultural workers scheme would be quadrupled to 10,000, though farming organisations say 70,000 temporary visas are needed.

Conclusion

This dramatic reform is a significant overhaul of the UK’s immigration system, prioritising the reduction of overall numbers and the rebalancing of skill levels. On an economic level, the reforms bear genuine consequences for a number of sectors and regions, many of which will struggle to fill labour shortages.