The cost and complexity of UK immigration

The immigration debate
The immigration debate

British business must take an urgent stand on UK immigration and send a clear message to government to leave the skilled migration routes alone, argues Katrina Cooper of international law firm Faegre Baker Daniels.

Non-EU skilled migration accounts for just 0.066% of the total UK labour force. A minimal amount, yet critical to so many UK businesses. The Prime Minister David Cameron has made a firm pledge to reduce net migration from hundreds of thousands to tens of thousands, something that was promised in 2010 yet the coalition government failed to deliver.

With a parliamentary majority and stronger mandate behind them, the government is more determined than ever to deliver on this, but at what cost? As part of his ‘immigration taskforce', Cameron has asked the Migration Advisory Committee (MAC) to look at a number of key areas relating to skilled migration. One of these areas is to look at implementing a levy on Tier 2 visas with the intention of using these monies to fund apprenticeships.

There are currently 29,271 registered employers with sponsor licences in the UK. But why should it be the employer’s responsibility to help fund an apprenticeship scheme simply because they access skilled labour from outside of the EU?

In addition to this potential levy, the MAC has also been asked to review the genuine skills shortages and the length of time that such positions should be recognised as skills shortages, and consider tightening further the intra-company transfer route and raising minimum salary thresholds. If this was not bad enough for businesses, the monthly immigration cap was breached for the first time in June with several hundred applications being refused.

Enough is enough

Businesses must take an urgent stand and give clear messaging to Cameron to leave the skilled migration routes alone. On the whole, the current system works: it allows British businesses to plug the genuine skill gap and continues to help with the growth of the British economy. The Office of Budget Responsibility (OBR) has published objective data showing that increased immigration actually creates jobs in the long run. Similarly, a report by Credit Suisse confirms that if the government’s priority is economic growth and low unemployment then its negative focus on immigration is totally wrong.

A levy funding 300,000 apprentices will not help multinational organisations or address the very heart of the deep-rooted issue of finding skilled labour. To upskill the nation we have to go back to grassroots. We have to look at the education system and develop strong offerings throughout the STEM subjects. And we have to ensure equality for both our boys and girls coming through the system.

We need to have a deeper analysis of the skills shortages on a regional basis as opposed to the current practice of lumping together all data and reviewing skills shortages on a national basis. But most of all we need to have a commitment by all employers across the UK to invest in people – to train and upskill the existing workforce.

Existing UK employers that hold sponsor licences are already subject to excessive fees to bring in the skilled labour that is currently not available from within the UK. Comparatively, the UK is by far one of the most expensive jurisdictions in terms of government fees – the fees are as much as 700% higher than others in the EU. This excludes the newly introduced ‘health surcharge’ which can be an additional £1,000 for a five-year visa.
This is a complex issue that requires a solution engaging all stakeholders – making those businesses that use skilled migrants bear the costs is discriminatory. Businesses are required to seek out labour from abroad not because it is a cheaper option but because the skill set is simply not available from within the UK or EU. The solution must involve all employers.

Open for business

A suggestion could be to implement mandatory training expenditure across all businesses. For example, all businesses would be required to ensure that the equivalent of 0.5% of gross payroll is spent on employee training.
If all employers were required to have a mandatory training spend, this would support upskilling of the nation’s workforce generally and help to address the heart of the problem.

If employers fail to meet the required training percentage on an annual basis, they would then be required to pay an additional tax levy. That could then be added to the ‘apprenticeship pot’ or other critical initiatives required to help get Britain skilled and working, to help stimulate the British youth of today into actively seeking jobs and wanting to contribute to the economy.

This is only one potential solution that would certainly have a much greater benefit to the whole of the UK generally, and would not discriminate against those who currently rely on using the current immigration system legally in order to ensure that they remain economically viable and make a valid contribution to the UK economy.

The government’s current agenda and messaging is trying to appease a voting public which has not been presented with the full facts. The focus on reducing skilled migration is misplaced and is a smoke screen allowing the government to avoid addressing the real issues. The government’s previous message of ‘the UK is open for business’ is eroding quickly. Businesses that rely on skilled migrants are in for a very rocky and potentially expensive five years ahead.

Katrina Cooper, Counsel, London office of an international law firm Faegre Baker Daniels