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On 19 January, the Migration Advisory Committee (MAC) published its long awaited findings, following its wide ranging review of the Tier 2 route over the summer of 2015. This blog outlines the key recommendations and our thoughts on these.
Kingsley Napley has mixed feelings about the MAC’s Tier 2 report.
Many of the recommendations will come as no surprise to anyone involved in the consultation – for instance, the increase in the overall minimum salary to £30,000 and the extension of the Immigration Health Surcharge to intra-company transferees.
There are some welcome points in the report, such as the statements that the occupation-specific thresholds should not be changed and that the automatic work rights of Tier 2 dependants should not be restricted. We and others argued in favour of these in our submissions to the MAC and we are pleased that the MAC has listened.
But there are several recommendations which concern us.
The report states that an Immigration Skills Charge of £1,000 per year – in other words, £5,000 for a five-year visa – would have a significant impact on employer behaviour. This may be true, but the impact might not be as expected. Employers might decide to pay the charge and cut expenditure in other areas of their workforce.
The proposed new route for intra-company transferees working on third-party contracts is not unexpected, but the recommended salary threshold of £41,500 will have huge implications for IT outsourcing companies, as this is much higher than the salaries currently paid to many of their assignees. It will be interesting to see how the government responds to this recommendation, given that it relies on these companies for many of its own IT projects.
The recommended extension of the qualifying period for all intra-company transfers from 12 months to 2 years is unwelcome and will put yet more pressure on the Tier 2 (General) route.
We strongly oppose the recommendation that all people switching into Tier 2 (General) within the UK be subject to the resident labour market test. This is particularly bad news for international students, and therefore for British universities, who are likely to see a further drop in applications from overseas if this recommendation is adopted. If the numbers of international students fall, universities will have less money and will have to turn to other sources – including British students – to make up the shortfall.
MAC report - main recommendations and findings
Minimum salary thresholds
Immigration skills charge
Tier 2 (Intra-company transfer)
Tier 2 (General)
Automatic work rights for dependants
Although a lot of these recommendations were widely anticipated, in particular the imposition of a skills charge and the introduction of a new third party ICT category, other measures such as introducing the RLMT for Tier 2 switching applicants and including all Tier 2 in country applicants within an extended Tier 2 limits allocation were not predicted. On the positive side, it is to be welcomed that the MAC are recommending carve outs for graduate recruitment programme applicants and those in the public sector (albeit on a temporary basis) and it is a relief that the status quo is being maintained in respect of Tier 2 dependants and those working in roles on the shortage occupation list. We must now await the government’s response to these recommendations, most of which are likely to be implemented, based on past experience.
Click HERE for a link to the MAC’s findings.
For further information on the issues raised in this blog post please contact a member of the immigration team.
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