Although Brexit will significantly hit migration from the EU, the Government’s white paper on the immigration system to apply from 2021 could attract higher migration from non-EU countries

Brexit and the impact it will have on EU nationals already resident in the UK, as well as those arriving after exit day, have been key concerns for employers and individuals since the referendum vote in 2016. With the Government having now announced arrangements for EU nationals up until the end of 2020, for deal and no-deal scenarios, attention can turn to the future of UK immigration.

On 19 December 2018, the Government released its long awaited white paper on proposals for a future immigration system to launch in 2021. With free movement from the EU ending, the future immigration system will apply to both EU and non-EU nationals.

This follows on from the publication in September 2018 of the Migration Advisory Committee’s (MAC) report on EEA migration in the UK. The MAC made a number of recommendations in its report, many of which have been accepted by the Government and included in the white paper. 

The 164-page white paper covers the full spectrum of possible immigration routes, including visit, work, study, family and asylum – however, major reform is concentrated on work categories.

The new immigration regime will be implemented for 1 January 2021, the day after the planned Brexit transition period ends. While this may seem like a generous amount of time, immigration reform of the kind planned will take considerable time to negotiate. The Government has already announced it plans to consult extensively as part of the process.

How do the proposals for work-based visas compare to the current regime?

Skilled workers

The white paper sets out the proposals for creating a new skilled worker route, which appears to be intended to replace the current Tier 2 General route. The key changes of the new skilled worker route, when compared to the Tier 2 General route include:

  • the cap of 20,700 visas per year, applicable to most applicants outside the UK, will be scrapped;
  • the resident labour market test will also be scrapped, meaning that employers will no longer need to justify why they are employing a non-resident worker over a resident worker;
  • the skill threshold will be reduced from RQF level 6 (graduate level) to RQF level 3 (equivalent to A-levels and advanced apprenticeships), which will add more than 100 entry level professional roles and skilled trades to the list of qualifying occupations;
  • there will continue to be a salary threshold. However, the level will be determined after a period of consultation. The MAC previously recommended a salary threshold of £30,000 (with a lower threshold for entry level skilled roles). However, a salary threshold at this level will make it very difficult for roles in certain locations and in certain industries to qualify for sponsorship;
  • the skilled worker route will lead to indefinite leave to remain (ILR/permanent residence), as Tier 2 General does now; it will be possible for individuals from certain low risk countries to switch to the skilled worker route in-country, for example after entering the UK on a visit visa to look for work.

In addition to the new skilled worker route, a route for intra-company transfers (ICT) will be available, with requirements expected to be consistent with the current requirements under Tier 2 ICT – although, with the qualifying criteria under the skilled worker route being particularly generous, the future of the intra-company transfer route is uncertain. At present, the Tier 2 ICT qualifying criteria and application process are relatively straightforward, with an employer able to transfer an employee to the UK sometimes within a matter of days. The trade-off for this quick and easy process is that the employee will only be able to stay in the UK for a fixed period and, once they leave the UK, they are subject to the cooling-off period and in most cases will not be able to return to the UK for 12 months.

In contrast, under the current Tier 2 General, the qualifying criteria and application process are complex and time consuming, usually taking several months to navigate before an individual can relocate to the UK. The benefit of all this hard work up front is that the employee will accumulate time toward obtaining ILR, meaning they can stay in the UK permanently.

The proposals for the new skilled worker visa remove the more complex elements of the Tier 2 General process, namely the resident labour market test and the cap applicable to applicants outside the UK. However, the skilled worker visa will retain the benefits of accumulating time toward obtaining ILR. With the skilled worker visa appearing to be as easy to obtain as an ICT visa, but with greater benefits, it does raise the question of whether employers will cease to use the ICT visa and just opt for the skilled worker visa, regardless of the nature and duration of the move to the UK.

Temporary short-term workers

A new route for temporary short-term workers will be available for a transitional period (potentially ending in 2025). This route will only be available to certain nationalities (yet to be defined, but assume that it will include EU member status, possibly in addition to a number of other low risk countries), with visas issued for a maximum of 12 months, followed by a 12-month cooling-off period. This route will not be sponsored and can therefore be used flexibly (for example, seasonal workers in hospitality and agribusiness, and self-employed consultants working on client projects in the UK).

The proposal to create a category that could potentially be used to continue to bring low-skilled labour from Europe was unexpected. In its September 2018 report, the MAC specifically advised against the creation of such a category.

Employers who have relied on skills and labour from EU member states will now have more time to adjust to the ending of free movement. However, it remains to be seen what the uptake of this visa will be. When compared to free movement this visa is a poor option, given the 12-month maximum period of stay. EU nationals will continue to have a choice of where to work, with a 12-month visa for the UK possibly a less attractive option than working elsewhere within the EU.

What will be key is the nationalities that will qualify, with this visa possibly being more attractive to individuals from countries outside the EU, who are not typically able to work freely in other countries. This could see a significant shift in the recruitment practices of those UK employers who rely on short-term skills and labour from EU nationals, with efforts concentrated on qualifying locations outside the EU.

Impact on net migration

In 2010, the Government committed to reducing net migration to the “tens of thousands, from the hundreds of thousands”. The last time net migration was fewer than 100,000 was 1997, with the figure hovering around 250,000 since 2004. The Government continues to work toward returning immigration to “sustainable levels”.

While the end of free movement will undoubtedly have an impact on net migration, the proposals set out in the white paper will create an immigration system that in many ways will be far more generous than that of comparable economies. Therefore, while we may see a reduction in net migration from the EU, as EU nationals opt to work elsewhere in Europe, we may see higher migration from non-EU countries. This would continue the trend since the 2016 referendum, with net migration from the EU seeing the largest decrease since the financial crash, but net migration from non-EU countries increasing to compensate.

What we can take from recent immigration statistics is that the UK continues to be an attractive destination for international workers, and employers continue to rely on these workers to fill vacancies that cannot be filled by resident workers. As long as this is the case, it remains to be seen whether immigration policy alone will have an impact on net migration.

The Author
Jessica Pattinson is head of Immigration at Dentons UKME LLP  
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