Getting to grips with points-based immigration

Immigration continues to be a highly politicised and sensitive area. The government is keen to use objective data received on the impact of migration on the British economy to continue to monitor and change the newly introduced points-based system (PBS). The government is eager to demonstrate that the pledged flexibility offered by the PBS can respond to Britain’s changing economic circumstances.

The Migration Advisory Committee (MAC) last month issued its report in response to two of the three questions posed by the government in February in its review of certain aspects of the immigration system as a result of the economic downturn.

The MAC was set up by the government as an independent body tasked with providing research-based advice with respect to migration factors and their impact on UK labour markets. The MAC is made up of leading economists, policy and administrative staff. It focuses on obtaining qualitative evidence, and works largely with stakeholder groups such as the CBI, TUC and the NHS.

Since its inception the MAC has worked on identifying which shortages in the UK labour market can be ‘sensibly’ filled by migration and has developed the current shortage occupation list for tier 2, which was first released in September 2008 and further updated and modified in April 2009. To date, some stakeholder groups have been concerned that the work of the MAC does not take the real needs of the UK economy into account, believing that any occupational labour shortage list must be able to recognise and adapt quickly to changes in the availability of labour.

What the government wantedIn February 2009 the government set the MAC specific questions pertinent to the economic downturn and the need to ensure that resident workers are not displaced within UK labour markets. Gordon Brown’s controversial pledge of ‘British jobs for British workers’ was rearing its head again. The MAC was tasked to report on the following:

The MAC put out ‘a call for evidence’ to stakeholder groups and to multi-national companies in April 2009 to assess, through objective data, statistical evidence and ‘bottom-up’ evidence, the effect on British business of imposing such restrictions. The most alarming question for UK businesses was whether there was a case for restricting tier 2 (the employment category of the PBS) to shortage occupations only.

MAC recommendationsOn 4 August 2009 the MAC published a detailed report dealing with the first two questions and should be reporting on the third by the end of October 2009. The MAC considered the consequences of the recession, but concluded that a well-designed points system for immigration should operate so that flows can easily adjust in response to changing economic circumstances.

In answer to the government’s initial question, the MAC was categorical: ‘We do not think there is an economic case for restricting tier 2 to the shortage occupation route only.’ However, the MAC made 16 recommendations for improving the design and enforcement of some routes under tier 2.

Points awarded under tier 2The first six recommendations related to the calibration of points awarded under tier 2. The MAC requested that the government consider whether specific professional qualifications should be regarded as equivalent to national vocational qualification level 3 or to bachelor’s or master’s degrees level, when allocating points. The MAC also suggested that a master’s degree should be awarded 15 points rather than the current 10. These two recommendations obviously promote greater leniency towards the skilled migrant.

The MAC’s further proposals relating to points urged the government to increase the prospective salary required for the allocation of points. If the MAC’s recommendations are implemented, to gain five points the applicant will need to have prospective earnings of £20,000 (previously £17,000), while to obtain the maximum 20 points the applicant must have prospective earnings of at least £32,000. The 10- and 15-point thresholds will accordingly be shifted to earnings of £24,000 and £28,000 a year respectively.

The MAC also recommended that under the resident labour market test (RLMT) route an extra five points be allocated to those involved in the delivery of key public services. It would appear that this recommendation is to rebalance the points allocation for those working in the public sector, who have traditionally received a less competitive salary than those in the private sector.

In making this recommendation the MAC seems to have overlooked the value placed on workers in the voluntary or not-for-profit sectors. These workers are faced with comparatively low pay and may struggle to receive adequate points through an assessment of their salary, but may also not qualify as key workers. Yet assessing whether an occupation is a key public service might introduce the kind of discretion that the government has continuously refused to entertain because it would destroy the concepts of transparency and objectivity that underpin the PBS.

Resident labour market testThe MAC has recommended that the RLMT route remain in place, but also that the required period for advertising be extended from two weeks to four weeks for all positions. This will obviously place further costs and administrative burdens on employers, as they will need to assess copious job applications received over the extended period in response to the mandatory and often worthless advertising in JobCentre Plus and other media dictated by the government.

What is set to be a highly controversial recommendation is that of a certification regime for the RLMT, at least for those employers that are considered ‘high-risk’. This recommendation begs the question of how the government will identify those that are ‘high-risk’ in what is supposed to be an objective system. Under the PBS, employers are already required to self-certify by assigning certificates of sponsorship; a further certification regime will be even more onerous.

Tier 2 (intra-company transfer) Employers, particularly global employers who rely on the intra-company transfer (ICT) subcategory as the only viable route into the UK for many overseas employees, will be relieved that the MAC did not recommended the limitation of tier 2 to shortage occupations only. The MAC did, however, recommend limiting tier 2 (ICT) applications by increasing the required period of previous employment with the company from six to 12 months, and removing it as a route to indefinite leave to remain in the UK. The ICT route has largely been taken by employees required in the UK for short periods, but the removal of the path to settlement will certainly make employees think twice about displacing their families from their home country and transferring them to the UK if they do not have the reassurance that, following a limited number of years in the UK, they will gain the right to settle here permanently.

The MAC also recommended a separate scheme for graduates that will only require three months’ prior experience with the company and will entitle the individual to a maximum 12-month stay in the UK. This recommendation appears to be addressing the gap that has been left for those employees wanting to undertake an internship in the UK. However, the government has previously announced its intention to explore a new employer-led route for interns, which may leave this particular MAC recommendation redundant.

The MAC’s final point on tier 2 (ICT) was that the government should consider if the level of resources being devoted to the enforcement of ICTs is enough and if the degree of transparency around enforcement of the system could be increased. Employers want to ensure that they are operating correctly under the onerous duties of their tier 2 sponsor licences. It is likely therefore that a supportive system of enforcement will be welcomed by business.

AllowancesFinally, the MAC recommended the scaling down of allowances when calculating points for earnings under the PBS and also that the UK Border Agency and HM Revenue & Customs consider the scope for sharing more information, allowing for the investigation of potential abuse of the system.

Where next?The MAC’s assessment of the economic contribution of tier 2 dependants was less than robust. It tentatively reported that ‘data on PBS dependants is highly limited, and any findings are subject to important caveats, but it appears that… just over half of spouses and partners are in employment… the majority of [whom] are in unskilled occupations’. It acknowledged this as an area ripe for further data collection, but on the basis of the limited information said ‘there is not sufficient reason to conclude that greater restrictions on working rights for dependants would lead to improved outcomes – either for UK workers or the UK economy’.

Throughout the report the MAC identified areas where further research and analysis may be justified and it is now for the government to gauge the usefulness of the MAC’s recommendations in fulfilling its desire to further reduce the flow of non-EEA migrant workers to the UK. The government is likely to make an announcement in September to include the acceptance/rejection of these recommendations from the MAC.

British and international businesses, migrants and, of course, immigration solicitors wait with trepidation to see what further tightening of immigration will take place. The bold boast that British business employs world-class talent from the world’s labour market appears to be under threat.

Laura Devine, Laura Devine Solicitors, London. Antonia GrantandJennifer Stevens also contributed to this article