As the UK leaves the EU, the country’s government was advised to change plans for a points-based system by the independent Migration Advisory Committee.
The MAC said: “No perfect system exists and there are unavoidable difficult trade-offs”, while recommending a lower salary threshold for migrants than that proposed and called plans for a points-based system a “soundbite”.
The group said that the government should look to lower the minimum general salary threshold for skilled migrants by £4,400 a year from £30,000. A group of trade bodies had appealed for a minimum of around £20,000 in order to allow continued access to labour in skilled but low-paid jobs.
Professor Alan Manning, chair of the Migration Advisory Committee, recommended the use of points only for more highly-skilled migrants without a job offer. The points would be awarded based on factors like age, qualifications and previous study in the UK.
In a press conference Manning described the prime minister’s earlier promises of an Australian-style system as a “soundbite” and urged him not to repeat the “mistakes” of earlier attempts to impose a points system more widely.
Manning said: “Our recommendations are likely to reduce future growth of the UK population and economy compared to freedom of movement by using skill and salary thresholds.
“We estimate very small increases in GDP per capita and productivity, slightly improved public finances, slightly reduced pressures on the NHS, schools and social housing, though slightly increased pressure on social care.
The largest impacts will be in low-wage sectors and the government needs to be clear about its plans for lower-skilled work migration. The government should ensure that the mistakes of previous UK points-based systems are not repeated.”
UKHospitality CEO Kate Nicholls responded: “The future immigration system needs to work for the entire UK economy. That includes the hospitality sector which is the third largest employer in the country and provides jobs, training and opportunities in every region. Although the vast majority of the sector’s workforce is home-grown, businesses, particularly those in cities, need to bolster their teams with overseas workers. Hospitality is committed to upskilling its domestic workforce, but in the meantime, businesses are going to need to have access to non-UK talent post-Brexit.
“The low-skilled temporary visa route into work can work for our sector, as the majority of migrants in hospitality do not work in highly-paid roles. The MAC’s proposal that government looks again at how this would work in practice is welcome. A continuing route for these incredibly valuable workers is paramount, particularly as hospitality has had the highest proportionate number of vacancies for the past 18 years. Currently, it runs at 4.0 vacancies per 100 jobs, compared to a figure of 2.6 for the wider economy. The new system must be flexible enough to address sector-specific shortages across the economy and we are happy to work with to make the case for our industry.
“A helpful step forward would be to extend the Youth Mobility Scheme to EU countries and make this a vital part of future trade deals with other countries, thereby providing another route for young workers into the sector.
“The system needs to be flexible to address labour shortages and not focus solely on higher skills. We need skills routes for all and we are certainly willing to work with the Government to ensure the system is responsive, works for the UK and avoids unnecessary bureaucracy and costs for employers.”
Matthew Fell, CBI chief UK policy director, added: “Businesses know free movement is ending. A new immigration system that is fair and sustainable from day one is as important for many firms as our future trading relationships.
“Reducing the headline salary threshold will be welcomed by businesses, which argued that a £30,000 cap would be damaging. Yet even with a commitment to world class business training, it remains unclear how firms can hire for mid-skilled roles such as LGV drivers, joiners and lab technicians who don’t meet the £25,600 test.
“Flexibility will be needed to build a system that lets wages rise where there are shortages while helping businesses to access the skills and labour needed to grow all parts of the UK.”
Insight: The massive boom in coffee houses and non-greasy-spoon restaurants on the UK high street in recent years has been attributed not only to changing tastes and innovative entrepreneurs, but to their being cheap and plentiful staff available from the EU. The hotel sector has also benefited.
Brexit is set to change all that. In a study produced for the University of Surrey, Professor Chris Cowls MBE, CEO of Eproductive and Professor Andrew Lockwood, Emeritus Professor of Hospitality Management, reported that last year saw a decrease in the hours worked by EU staff and that hotels relied on EU employees for nearly one third of hours worked.
The pair said: “Replacing them will be difficult”. And that’s before you consider that there was a massive shortage in staffing even before the pound dropped and sending money home became less attractive for many EU employees. One hotelier told us that he had been looking as far afield as South Africa and Sri Lanka looking for staff, commenting: “There isn’t an imaginary pool of labour [in the UK] which says ‘great, I want to work in hospitality”.
And herein lies the problem and the solution. The government is not willing to let in anyone earning what many hotel workers earn, so no matter how the regime looks, hotels must rely on adroit use of technology - and trying to create that imaginary pool. The sector has successfully sold itself as an asset class to investors, now it must sell itself as a career to the service-wary British.