The MAC is back!

Every person, who is even vaguely aware of the UK immigration, has heard of the infamous Migration Advisory Committee abbreviated simply as the “MAC”.

Although, the MAC is an independent public body that advised the government on migration issues, its recommendations are generally accepted by the Home Office.

Since, the current Conservative government’s pledge to reduce the net migration in the UK was first made by the UK Prime Minister, David Cameron, the MAC has produced a number of reports upon the government’s request advising on variety of migration issues, concentrating mainly on the ways to achieve the goal of reducing the net migration.

Every time a report is published, the government reviews the recommendations and choses the ones it wishes to implement. The current government has been almost systematically tightening the immigration rules following publication of each of the reports.

Last year the government has again commissioned the MAC to carry out a review of Tier 2 visa route with a view to recommending proposals that would substantially restrict inflows of migrants under the route. The government, among other things expressed concerns about the rising number of migrants in that route and the perceived overreliance by the employers on foreign migrants to fill shortages in the labour market instead of using British workers.

In summary and for those of you who do not know what this route is, Tier 2 of the Points Based System is a primary route for economic migration to the UK. This route is for skilled workers from outside the EEA who have an offer of employment in the UK in an occupation classed as skilled in the Immigration Rules. Since, April 2015, Tier 2 migrants are generally required to earn at least £20,800 per annum.

The MAC has provided its report, which is almost 300 pages long, to the government last month, but it was only released to the general public on 19th January 2016. The report covers various issues, but I outline the headline recommendations below:

  • Most noticeably, the MAC has recommended that the minimum salary threshold should be increased to £30,000 to reduce the number of Tier 2 migrants. Just compare that figure with the current UK national minimum wage of £13,124 to appreciate how restrictive that measure would be for the foreign migrants and businesses looking to hire such workers. At least, at the moment the recommendation is for a phased implementation.
  • A new Immigration Skills Charge (ISC) is strongly supported by the MAC. This is basically a skills levy on businesses employment Tier 2 migrants. This, in theory should provide an additional incentive for businesses to reduce their reliance on foreign migrant labour and to encourage investment into training of British workers. It has suggested an upfront surcharge payment of £1,000 for each year of the Tier 2 visa.
  • The MAC has recommended an overhaul of the Tier 2 Intra Company Transfer (ICT) route, which allows multinational companies to transfer their skilled employees from their branch outside the UK into their UK branch of the company. This would involve for example, potentially a higher salary threshold of £41,500 in certain cases and increase in the prior experience with the employer from 1 to 2 years.
  • Finally and quite remarkably, the MAC has not recommended any additional restriction on work rights of the Tier 2 dependants.

These recommendations will now be reviewed by the Government. Although, there has been no announcement on timing, we expect any changes to be introduced on 6 April 2016 as the main date for introduction of new immigration legislation changes in the UK.

If the Government accepts these recommendations, we expect serious consequences for employers, who may struggle to deal with the combination of the increased salary and an additional levy. We will have to wait and see how employers will cope with the skills shortage businesses will be facing.

Lawyers at Edmans & Co are advising employers to consider accelerating any Tier 2 applications and intra-company transfers, prior to April 2016 when the changes are likely to come into force.

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