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MAC report on salary thresholds and the ‘Australian-style points-based system’

28 Jan 2020

The Government’s Migration Advisory Committee has made a series of recommendations for the post Brexit immigration system, including lowering the minimum salary from £30,000 per year to £25,600. These would apply to both EU and non EU workers applying to work in the UK.

Under the recommendations, most teachers and NHS workers would be exempted from the £25,600 threshold, and new entrants to the labour market – those under 26 and recent graduates from UK universities – could be granted permission to work in the UK with much lower salaries – a minimum of £17,920 per year.

The reduced salary thresholds are designed to include middle skilled workers as well as graduates, and the level is calculated at the 25th percentile of average salaries for these occupations. The salary thresholds will vary by occupation, remaining at the 25th percentile for the role.

Among the key recommendations:

  • The MAC has recommended that most skilled workers should earn at least £25,600 to qualify for a long-term work visa, with lower rates for nurses and various other public-sector workers. This is down from £30,000 under the current system for non-EU citizens.
  • In addition to meeting these thresholds, workers would also need to meet an occupation-specific one, which in many cases will be higher. The occupation-specific rate would be set at a level that would exclude the 25% lowest-paid workers within each occupation – an approach unchanged from the current system for non-EU citizens.
  • Required rates for young people under age 26 would be 30% lower. This means that in some occupations, young workers would only need to earn £17,920. The MAC also recommends that they should be able to stay on this rate for five years instead of the current three (though they may need much higher salaries to qualify for settlement after 5 years).
  • The MAC recommends against having lower salaries for jobs in the ‘shortage occupation list’ – something that the government proposed in its 2018 white paper – and against regional variation in salary thresholds.
  • The MAC suggests that an ‘Australian-style points system’ would bring little added value when deciding which workers could enter to the UK with a job offer. The MAC instead recommends that entry visas should be allocated based on employer sponsorship, as current happens for non-EU citizens.
  • However, the report suggests that a points-based system might be useful for deciding who gets permanent settlement rights after a few years. It also suggests that small numbers of people without a job offer could be admitted using a points system.

Denis Kierans, researcher at the Migration Observatory at the University of Oxford, said: “For non-EU workers, what the MAC is proposing is a clear liberalisation. They are recommending a lower salary threshold for skilled workers than the £30,000 that’s currently in place, and a longer list of jobs that don’t have to meet the threshold. In some jobs, young people under 26 years old would be eligible for long-term visas at rates not too far off the minimum wage. But for EU workers, even this more liberal proposal is still much more restrictive than the status quo – fewer people will be eligible and it will be more bureaucratic and more expensive. It’s likely that for many employers, the biggest deterrent from bringing in foreign workers will not be the salary thresholds, but the cost and bureaucracy of the process.

“The MAC report does not exude enthusiasm for the ‘Australian-style points-based system that we have heard so much about over the past few months. It essentially says that the government needn’t bother with a points system for people coming to the UK with a job offer and that the current system relying on employer sponsorship should work fine for these people. That said, the MAC does suggest that a points system could be useful for workers without a job offer or for people applying for settlement after a few years in the country.

“It will be interesting to see how the Government responds, given that it is strongly committed to the idea of an Australian-style system. It wouldn’t be surprising to see a new system introduced that is branded as ‘Australian-style’ but actually looks rather like the ‘UK-style’ system we already have for non-EU citizens.”

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