Return of the MAC

Once again the government has turned to the Migration Advisory Committee (MAC) to review parts of the UK immigration system with a view to tightening up entry into the UK. This time around, however, it is the work authorisation visa category (tier 2) that is facing sweeping changes.

The points-based system (PBS) is the main route of entry to work, study, train, or invest in the UK, and employers are now facing the prospect of a wholescale overhaul to tier 2 that could have a significant impact on an employer’s ability to hire or sponsor non-European Economic Area nationals to work within this jurisdiction.

Since the 2010 election campaign, David Cameron’s government has made strong commitments to reduce and control net migration. The pledge to reduce net migration to the tens of thousands has been regularly cited by Cameron and the Conservative party. It is hardly surprising, therefore, that the government’s focus has now shifted onto the work authorisation visa categories as it looks for alternative ways of reducing the migration figures.

The preliminary review of tier 2 will not be completed by the government directly. It has instead instructed an independent panel of economists, the MAC, to review the visa category, present its findings, and make suggestions on how to improve it.

The timeline

The MAC was first commissioned in June 2015 to carry out a review of tier 2, with the commission split into two parts. The first call for evidence specifically asked what impact a significant increase in minimum salaries to sponsor non-EU workers would have on businesses and the wider UK economy. 

Published in August, the first MAC report urged the government to be cautious over any early decision to raise the minimum salary requirements for skilled migrant workers, pending the completion of the wider review later this year – jovially referred to as ‘the Big MAC’. 

The good news for businesses is that the MAC’s initial analysis found little evidence to suggest there is widespread undercutting of UK resident workers by tier 2 migrants occurring under the current salary thresholds. However, this finding is subject to further research being undertaken as part of the wider review. The Big MAC is considering a number of additional questions and is scheduled to report back to the Home Office by mid-December 2015. 

This leads us to speculate about what will be ?on the horizon for 2016. It is likely the MAC will publish its advice in early January. By February ?the Home Office should publish its statement ?of intent outlining its plans. Based on experience, this should be a key indicator of what to expect ?in the coming months. We envisage any new immigration rules being laid before parliament ?on 15 March, with the new immigration rules likely to take effect on 6 April 2016.

Questions for ‘the Big MAC’

As mentioned above, there have been a number ?of questions put to the MAC, and once the final report is published we will look at its final proposals and recommendations to the government. ?At this stage, however, it is the proposed changes to salary levels and the limiting of tier 2, e.g. through the use of quotas, caps, or the increased use of the shortage occupation list (SOL), that, ?in our opinion, pose the greatest threat.

While the MAC has to date urged caution at raising salary thresholds, what is being suggested is significant. The MAC is considering the case ?for increasing minimum salaries for sponsored workers looking to enter the UK, in many cases ?by between £10,000 and £25,000. Looking at solicitors specifically, the minimum salary could rise by as much as £15,000. For law firms looking to recruit junior lawyers and trainees, if the minimum salary figures are raised significantly, this could prove prohibitively costly.

In addition to raising salary thresholds, ?the MAC is also looking into whether to ?entirely stop companies from sponsoring non-EU workers unless they are highly specialised experts or filling a role that is suffering from a national skills shortage. Further considerations include sun-setting jobs on the SOL, i.e. limiting the length of time roles can be on the list, and preventing PBS dependants (spouses and partners of tier 2 migrants) from working while ?in the UK, a right they currently enjoy.

New Home Office approach

As part of the review, the MAC sent out two ?calls for evidence asking businesses to provide feedback and suggestions with regard to the proposed changes. Clearly the opinion of business and industry is important and this approach is indicative of the Home Office’s recent drive to improve customer service and work with companies to better shape UK business immigration.

At a recent event, Professor Sir David Metcalf, the chief MAC economist, made some interesting comments regarding the report due out in January. He suggested that at this stage, it was unlikely the MAC would recommend sweeping changes to amending or sun-setting the SOL. 

Furthermore, he did not envisage the MAC recommending that PBS dependants have their right to work removed – good news for migrants who rely on two incomes to run their households. It is of interest that Professor Metcalf commented on how tier 2 intra-company transfers (ICTs) ?make up a substantial part of the UK’s migrant population and that the MAC is looking for ways to reduce this. One way to reduce the number of ICTs, as the professor explained, would be to place a cap on the ICT visa category.

Professor Metcalf was talking at an event for companies that are part of the Home Office’s premium sponsor scheme. Becoming a premium sponsor, for the annual sum of £25,000, provides companies with access to a number of priority visa services as well as priority treatment on changes to their sponsor licence. While many might argue that £25,000 is a substantial sum, ?the benefits are numerous and the scheme itself ?is indicative of the Home Office’s drive to provide sponsors, in this case the ’premium’ sort, with ?the highest level of customer care.

Watch this space

So, what next? Well, in short, we have to wait. ?We, the private sector, do not anticipate access ?to the Big MAC report until the mid-way through January 2016 and even then the MAC is only acting in an advisory capacity. It will be interesting to see whether the government takes on board all of the MAC’s proposals, whatever these may be, or if it decides to carry out a complete overhaul of tier 2.

While the detail of the final report is unknown, it is clear from Professor Metcalf’s comments that the MAC will urge the government to act with caution, with any recommendations likely to focus on tweaks to the visa category. Whether or not the government accepts this advice remains to be seen. We will report back in the new year. 

Rajiv Naik is a manager and solicitor and Annabel Bennett is a solicitor at Fragomen @fragomen  www.fragomen.com