The UK has also long benefited from attracting high-skilled migrants not fleeing persecution to its shores. Such migrants fill skills shortages, contribute to economic growth, pay taxes, and enrich our culture. However, our current immigration system for high-skilled migrants (not for those fleeing persecution) is slow, rigid and fails to match newcomers with the jobs that need them most. Put simply, it lacks the efficiency of market mechanisms.
A new report from the Adam Smith Institute, ‘Optimising for our Openness’, proposes an innovative market-based solution: high-skill visa auctions, in which businesses can buy visas.
So what does that even look like?
Under our proposals, the UK government would auction off visas to high-skilled migrants. Employers and migrants would bid against each other, with visas being granted to the highest bidders, selecting the immigrants who will bring the greatest benefit to Britain.
The price paid for visas would indicate where the greatest demand lies – both in sectors of the economy and in specific roles. The system is self-regulating: when demand is high, the price rises, and when it falls, so does the price. The beauty is that it is employers and migrants
themselves who determine where resources are most needed.
This could hold the overall level of immigration constant while raising £59bn in direct government revenue (equivalent to a 11p in the pound reduction in the basic rate of income tax) and an additional £27.4bn in additional tax revenue that would compound for each year the scheme was implemented. A rare win-win policy which combines sensible immigration policy with what’s best for the economy.
Revenue from the auctions could be used to fund skills training for resident workers or public services. Some visas could be set aside for migrants with skills in shortage areas or from preferred countries. Minimum prices could prevent employers buying visas too cheaply. Bids might not be solely monetary but include training, local recruitment or community benefit commitments.
Such a system provides mobility and flexibility. Migrants could change jobs or sectors, with a new employer buying the remainder of their visa. Duration of visas could vary for different types of roles and migrants could re-enter future auctions to extend their stay.
Critics argue this approach commodifies migrants and bypasses employers’ duty to train resident workers. However, it does not compel anyone to take part or preclude conventional recruitment. It simply provides more options for responsibly managing high-skill migration by using price incentives and competition, instead of the Government trying in vain to determine labour needs and allocate resources rationally through a bureaucratic system.
Some will see high-skill visa auctions as controversial. But as we embark on a new post-Brexit immigration system, we must consider new mechanisms that provide control, flexibility and openness to global talent. Britain has long been an open, trading nation, and high-skill visa
auctions could optimise our openness to migration in the 21st century. Britons also are very open to high-skilled immigration compared to low-skilled immigration.
Our report represents an exciting opportunity to pilot a radical market-based approach, consistent with Britain’s entrepreneurial spirit. Our economic growth and public services desperately need high-skilled migrants, and an innovative solution like this can help provide them, whilst also being politically palatable to a British public that wants more of some kinds of migration, but less of it overall.
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