Business leaders condemn proposals for Tier 2 visa curbs

UK business leaders have been unanimous in their condemnation of proposals from the government’s Migration Advisory Committee (MAC) for a raft of measures to reduce companies’ ability to hire skilled workers from non-EU countries.
The MAC, which was ordered by Prime Minister David Cameron to come up with suggestions to curb migration under the Tier 2 visa system for skilled workers, has proposed measures including curbs on intra company transfers (ICTs), large increases in salary thresholds and a £1,000-a-year levy on employers for each Tier 2 hiring.
Ministers – under pressure from the electorate to cut record net migration to the UK – appear likely to accept the new curbs although Simon Walker, director general of the Institute of Directors, is urging the government to dismiss the proposals, which he says would damage business while doing little to reduce overall migration.
“The MAC’s proposals will hurt thousands of individual firms, which will find it harder to bring in the skilled workers in areas like IT, where we have shortages. Coming on top of the new apprenticeship levy, and the national living wage, the new tax on recruiting from overseas will pile further costs on businesses,” he said.
“The salary thresholds are particularly short-sighted, as they would block valuable employees like engineers, while not catching high-earning bankers or lawyers. It is likely to be the public sector which suffers most, as the thresholds make it harder to recruit much-needed nurses and teachers from abroad.
“Even so, as the committee admits, these plans would only make a ‘modest’ contribution to cutting overall net migration. Instead, this will send a message around the world that the UK is no longer open to international talent.”
Neil Carberry, director for employment and skills at the Confederation of British Industry (CBI), commented, “The MAC rightly recognises that in a global economy, skilled migrants are important to addressing UK skills shortages and to attracting investment. At the same time, it’s critical to invest in our own skills system and to manage the impact of migration on public services.
“However, the MAC’s recommendations to increase migration visa costs and salary requirements could hold back firms’ ability to grow and create jobs, particularly for exporting, medium-sized businesses.
“They would increase the cost of hiring skilled workers at a time when businesses are already having to manage government policies like the apprenticeship levy.”
Dr Adam Marshall, executive director of policy at the British Chambers of Commerce (BCC), added, “With businesses reporting severe recruitment difficulties, especially for highly-skilled and specialised positions, it makes no sense to slap new charges on firms that need to recruit from overseas – often because they are left with little alternative due to skills gaps here at home.
“The Migration Advisory Committee is wrong to recommend yet another tax on firms, hot on the heels of the apprenticeship levy, pensions auto-enrolment, and the national living wage – not to mention the high fees companies already pay for sponsor’s licenses and visas for specialised staff from overseas.
“Ministers should reject this recommendation, and tread carefully on others – including higher minimum salary thresholds, which could stop many regional companies getting the skills they need.”
The manufacturers’ organisation EEF said the proposed changes would curb the ability of firms to grow, especially smaller ones. “Global businesses have an expectation that they are able to move talent globally,” said Tim Thomas, head of employment and skills at EEF.
“Restricting this reduces their ability to win and meet orders and subsequently damage their competitiveness. It also sends a signal to the rest of the world that UK is not an attractive place to invest and do business.”
On ICTs, which allow multinational companies to transfer key personnel from overseas branches to the UK for periods of up to five years, Prof John Salt, from the migration research unit at University College London, said the ICT route had been a “major element of the talent” coming to the UK.
“The majority of certificates of sponsorship are now going to people either working in IT or into IT-related jobs. The balance of skills coming into the UK economy has shifted and it is not very well-balanced at all now,” he added.
Ironically, the MAC’s proposals coincided with the publication of the Global Talent Competitiveness Index showing the UK remains seventh in the world rankings for its ability to attract, develop and retain highly-skilled migrants.
The index, compiled by the Adecco Group, international business school INSEAD and the Human Capital Leadership Institute, placed only Switzerland (in first place), Singapore, Luxembourg, the United States, Denmark and Sweden ahead of the UK.
Prof Salt commented, “Luxembourg, Singapore and Switzerland are relatively small countries with a global reach and by definition they are going to be importing skilled workers. The only one above the UK with a population of any size is the United Sates and, given the economy of the US, it is not surprising that they are up there.”
Alex Fleming, managing director of Adecco Group UK and Ireland, added, “The index demonstrates how Britain is one of the best countries in the world at attracting skilled migrants, ensuring that we have the skills we need to continue to build a strong economy.
“With the referendum on Britain’s membership in the European Union looming, this report raises important considerations for policy makers and industry, particularly when it comes to labour mobility.”
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