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£1,000 charge per non-EU skilled migrant worker proposed

Published 19/01/2016

The study claimed that the money raised could to towards skills training for British workers
The study claimed that the money raised could to towards skills training for British workers

Companies would be forced to pay an annual charge of £1,000 for every skilled worker they employ from outside Europe under proposals from the Government's official migration advisers.

Ministers were urged to raise the minimum salary threshold from £20,800 a year to £30,000 for the main route used by non-EU migrants coming to Britain for work.

In another significant finding, a major report by the Migration Advisory Committee (MAC) suggested that any undercutting of domestic employees by staff arriving under the Tier 2 skilled worker scheme is "largely confined" to the public sector.

It also called for rules on transfers within companies to be tightened amid indications the route was being used to bring over migrants to service third-party contracts rather than highly specialised senior personnel.

The MAC was asked to investigate possible changes to Tier 2 visa requirements for skilled employees from outside the European Economic Area last year to address concerns about the rising number of migrants in the route and the reliance on them to fill shortages in the labour market.

When applicants' family members and all avenues of the system are included, experts say the route accounts for an in-flow of 151,000 people to Britain a year.

Indications suggest that raising salary thresholds would mean 27,600 fewer individuals would come to the country, or around 18% of the total, and this would be higher if the levy proposal is accepted, the MAC estimated, although it said it was impossible to be definitive because the impact will depend on how firms respond.

The committee said it "strongly" supports the introduction of an Immigration Skills Charge, arguing an upfront annual levy of £1,000 per Tier 2 migrant could provide £250 million for skills funding each year.

Professor Sir David Metcalf, chairman of the MAC, said: "Raising the cost of employing skilled migrants via higher pay thresholds, and the introduction of an Immigration Skills Charge, should lead to greater investment in UK employees and reduce the use of migrant labour."

Under Tier 2, skilled workers must currently have a job with an annual salary of at least £20,800. The MAC said that raising this to £30,000 would better represent the current degree-level skill requirement for Tier 2.

The report also examined how salaries paid to non-EU skilled staff compare with the UK workforce and found that generally Tier 2 migrants were paid more, supporting the view that those in the route bring "scarce skills".

However, it said some occupations in which Tier 2 migrants are paid substantially less than native workers in similar roles and these were "predominantly" in public sector occupations.

It estimated that on average, Tier 2 doctors and nurses are paid £6,000 less a year than their native peers, while secondary school teachers earn £2,000 less annually.

The report said: "If any undercutting is taking place under Tier 2, it appears to be largely confined to the public sector."

It also called for an overhaul of the intra-company transfer route which allows multinational companies to move key personnel from overseas branches to the UK for temporary periods.

The conventional use of the route, where small numbers of highly skilled specialist staff are brought to Britain, delivers "significant benefits" but it was also increasingly being used for third-party contracts, particularly in the IT sector, the report found. Indian IT workers were said to comprise more than 90% of such migrants.

The MAC said third-party contracting should become a separate route, with the salary threshold raised from £24,800 to £41,500 to act as an "effective proxy" for senior managers and specialists.

It also recommended extending the qualifying period to be eligible for intra-company transfers from 12 months to 2 years.

The Institute of Directors urged the government to reject the proposals, saying they will "hurt thousands of individual firms".

Director General Simon Walker added: "T his will send a message around the world that the UK is no longer open to international talent."

A Home Office spokesman said: "We are grateful to the Migration Advisory Committee for its report. We are considering its findings and will respond in due course."

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