The Migration Advisory Committee (MAC) has finally published its long awaited report on the impact on the UK labour market of the UK’s exit from the European Union. The MAC was commissioned by the Government to assess the impact of EEA migration on the UK’s economy and society as well as to consider recommendations for the UK’s future immigration system.
With international mobility and collaboration a particular feature in the life sciences sector, any changes to the UK immigration system are likely to affect employers and employees in this sector. Indeed, recent research undertaken by the UK BioIndustry Association (‘BIA’), the trade association for innovative life science organisations in the UK, and the Association of the British Pharmaceutical Industry (‘ABPI’), indicates that up to 41% of the workforce of their members are non-UK nationals.
No preferential access for EU citizens
The headline recommendation from the MAC report was that there should be no preferential access to the UK for EEA citizens in the future.
This recommendation is surprising in view of the fact that the MAC report concluded that EEA immigration to the UK has had virtually no negative impact on the UK economy or society. The MAC found that EEA migrants actually make a positive net contribution to public finances, paying more in taxes than they receive in benefits.
Many employers, including those in the life sciences sector, also submitted evidence to the MAC emphasising the importance of being able to continue to hire EEA employees with little or no red tape. Merck, for example, stated in its response that it will be critical for companies to continue to have access to highly skilled EEA workers with minimal cost and administrative burdens. They added that any move to limit access to such EEA nationals would only serve to exacerbate an existing skills shortage and restrict the ability of the UK science and technology sector to continue to lead the way. It seems, however, that their views have been largely ignored, especially as it has since been reported that the Cabinet has agreed with the MAC’s recommendation that there will be no preferential access to the UK labour market for EEA nationals and that the future immigration system should be based on skills rather than nationality.
Disappointingly for many employers, the MAC also recommended that there is no need for a separate low-skilled worker scheme, with the possible exception of a seasonal agricultural workers scheme. Instead, the focus should be on highly skilled migrants.
Subsequent reports are that the Cabinet has agreed that the focus should be on skilled migration but they nonetheless backed a scheme proposed by the Home Secretary, Sajid Javid, to create a specific route for low-skilled workers to come into the UK and work in sectors such as agriculture, social care and hospitality.
If such a scheme is introduced it would be welcome relief to employers where sourcing sufficient workers from the UK workforce to fill low skilled roles in these areas has been a real struggle, especially given historic low unemployment rates.
Focus on highly skilled workforce
That said, the majority of the roles filled by non-UK nationals in the life sciences sector are highly skilled roles, such as in scientific research and development. In order to overcome skills shortage a significant percentage of such roles are filled by individuals from the EEA and the rest of the world. For those businesses which rely on migrants from around the world, the MAC does make some welcome proposals, for example:
- Abolishing the annual Tier 2 cap of 20,700 per year;
- Expanding this route to cover medium skilled roles as well as highly skilled roles. This would make an additional 142 occupations potentially eligible for Tier 2 (General) provided they meet the minimum salary threshold of £30,000 per annum, including Health Care Practice Managers, Medical and Dental Technicians, Laboratory technicians and other health care professionals;
- Abolishing the ‘Resident labour market test’ –i.e. the advertising and recruitment process that is often required before an employer is able to sponsor someone under the Tier 2 (General) category;
- Relaxing the requirement that employers may only sponsor someone if there is no suitable settled worker and allowing employers to appoint the best candidate; and
- Allowing Tier 2 migrants to switch employers more easily.
However the report also proposes using the current Tier 2 sponsorship system as a template for the future system and specifically recommends making EEA nationals subject to the Immigration Skills Surcharge, which would add up to £5,000 to the cost of employing an individual for a 5 year visa.
Further, those UK employers who already sponsor non-EEA migrants under the Tier 2 route will know how cumbersome and expensive the process is. In their response to the MAC’s initial request for information the BIA and ABPI criticised the current system as being overly bureaucratic and Merck described the current system as being very burdensome and difficult to negotiate. The concern is that if, in the future, EEA nationals are subject to the same levels of red tape currently faced by non-EEA nationals this will cause delays and costs for businesses and may deter EEA nationals from coming to the UK. The MAC report acknowledges these criticisms and recommends that the Government tries to reduce the bureaucracy although no guidance is given as to how.
It is unlikely that any changes will come into effect immediately after Brexit as both the MAC and industry bodies have acknowledged the need for changes to be introduced gradually. It is likely that there will be a transitional period until 31 December 2020 during which EEA nationals will continue to be able to come to the UK with few or no restrictions.
That said, nothing is certain and the life sciences sector, as with all employers, will need to await the outcome of the Brexit negotiations and the Brexit White Paper (due to be published later this autumn) for a better indication as to what the post Brexit immigration system will look like.