23 January 2020

Ditching the migrant salary threshold is long overdue

By

If reports are to be believed, the Government is planning to do away with the £30,000 salary floor for skilled migrants. If so, it’s another welcome signal the Conservatives are shifting away from the economically damaging, poorly designed immigration policies of the May era.

The notoriously ineffective ‘tens of thousands’ net migration target — which prioritised numbers over needs — is now dead in the water. Reviving the post-study work visa means that we can once again attract top global talent to live, work and build successful businesses in the UK. The Prime Minister has even signalled openness to an amnesty for illegal immigrants, which would boost the economy, prevent exploitation, cut crime and encourage integration.

The independent Migration Advisory Committee is due to report shortly on the question of salary thresholds, but the £30,000 threshold has already faced widespread criticism from business groups, creative industries, universities and health and social care providers.

Employers have rightly expressed concern that such a high and hard floor on hiring foreign workers wrongly equates salary with skills shortages. The end result would be more pressure on the NHS, a less productive economy and lower living standards across the board.

Good riddance to a bad policy!

However, proposals for an updated points-based immigration system still pose a number of serious questions. For a start, overhauling our entire immigration system in just one year is a huge task. A lot of employers plan their hiring decisions well in advance, and any lack of clarity over the new rules is likely to make life difficult for them.

More fundamentally, it means bureaucrats in Westminster will centrally plan a big chunk of the labour market after Brexit: despite lacking the necessary local knowledge and being subjected to incessant lobbying by special interests. The best way of building prosperity and filling skill shortages is by harnessing the power of market forces: that could be achieved either by keeping EU free movement of labour or implementing a visa auction system.

Political reality right now means neither of these options is on the table (although we can expect the EU to demand some level of flexibility on workforce movement during trade deal talks), but there are still ways of making a points-based system work more effectively.

The devil is in the detail. Introducing regional variation in salary provisions would mitigate some of the damage caused to areas like Scotland that heavily depend on the contribution of EU workers. Making it as easy as possible for people with recognised qualifications from reputable institutions across the world to work here would help too.

On the flipside, if we continue to make restrictive and expensive employer sponsorship a requirement for most visa applicants (which is the opposite of an Australian-style points based system), the UK will attract fewer skilled migrants and leave foreign workers at greater risk of exploitation.

As they plan the future of migration in the UK, the Government should consider whether the public are still as keen on clamping down as they once were. After all, our general attitude towards immigration has become markedly more positive since the Brexit vote. Nearly two-thirds of Brits held a negative attitude towards immigration in 2011, compared with just 26% today.

Although this could be partly down to an expectation that immigration will fall, two other plausible factors may have also played a role. The first is a renewed focus on the impacts of immigration in national debate over the past few years. Indeed, a growing body of evidence shows that simply learning the facts about the economic impact of immigration can change people’s minds.

The second is that ‘taking back control’ of our borders is not—at least for some people—synonymous with a more illiberal approach. Perhaps I’m being naively optimistic, but it seems as though the immigration debate is slowly becoming less toxic. And scrapping salary thresholds is another step in the right direction.

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Daniel Pryor is Head of Programmes at the Adam Smith Institute