17 July 2019

If we want to build a Global Britain, the migrant salary cap must go

By Blythe Edwards

It’s been said time and time again that leaving the European Union is an opportunity for the UK to build a fairer, more streamlined immigration policy. If we’re serious about sticking to these sentiments, and becoming a more global Britain after Brexit, scrapping the current annual salary threshold for migrant workers would be a good place to start.

The current threshold of £30,000, which is set to extend to all non-UK workers once the UK leaves the European Union in October, has faced widespread criticism, including from business, policy experts and both Labour and Conservative MPs.

The White Paper from last year introducing Theresa May’s ‘skills-based immigration system’, described by the Prime Minister as a plan that “welcomes talent, hard work, and the skills we need as a country”, seemed primarily designed to crack down on low-skilled immigration.

But far from being in the UK’s so-called “best interests”, the tightening of immigration policy makes it harder for skilled migrants (many of whom have received their education or training here) to work in the UK.

It is short-sighted to assume that entrepreneurial talent is reserved for those already hitting a high income bracket. Income metrics often fail to appropriately account for ability levels. In some ways, young people (including recent-graduates) are most able to forge their burgeoning careers in the UK, yet they are also unlikely to land a high-paying job straight out of university. Graduates and young people are unfairly affected by caps like this and as a result might take their talents to more welcoming countries.

As the UK population ages, companies need migrant workers at all levels to continue to grow and prosper. It’s pure hubris to assume that government can predict the economy’s complex labour requirements and design an optimal workforce. With unemployment rates the lowest they have been since the mid-1970s, mobile migrants are crucial to filling critical gaps in the UK labour market, such as construction, manufacturing, and agricultural harvesting, which have been heavily dependent on EU labour.

The health and social care sectors in particular, tasked with caring for a rapidly growing older population, are highly reliant on migrant workers. Low-wage does not necessarily mean low-skilled. As NHS Providers deputy chief executive Saffron Cordery explained “You have got starting salaries for nurses at £23,000 – also for paramedics, midwives. Junior doctors starting salaries at £27,000, healthcare assistants at £17,000, all coming in way below that £30,000 cap”. Indeed, the notion that lower-skilled workers are more a burden rather than an asset is fundamentally misguided.

Evidence overwhelmingly demonstrates that migrants, both low and high-skilled, are not only an excellent labour supplement for UK businesses, but also contribute significantly to the economy. Research by The Entrepreneurs Network shows that while only 14% of UK residents are foreign-born, a whopping 49% of the UK’s fastest-growing startups have at least one foreign born co-founder.

Rather than extending harmful minimum salary restrictions to EU citizens, Brexit should be an opportunity to scrap damaging immigration policies altogether and establish an equal playing field for all prospective migrants. Britain needs a system which treats migrants as individuals rather than as widgets with value, determined solely by their nationality or current income level.

To establish a more global Britain, which looks as much to India and North America as to the continent, any post-Brexit government should seek to eliminate the built-in prejudice favouring European migrants. But this levelling should come by eliminating the economically damaging immigration requirements in their entirety, not by extending the policy to inflict equal detriment.

Promisingly, both Conservative leadership contenders have expressed a willingness to reconsider the policy. As well, Home Secretary Sajid Javid has recently asked the Migration Advisory Committee to reconsider the proposal.

Since the vote to leave the EU, many appear to have fundamentally misunderstood the principles behind the Leave vote. The drive to re-establish control over the UK’s immigration policy does not automatically equate to a narrow obsession on cutting net immigration “to the tens of thousands”, which, if achieved, would be badly damaging to native Brits as well as migrants.

After October 31, the UK should seek to preserve and enhance its position as a global hub for entrepreneurial talent. Immigration represents potential for the UK economy that will benefit everyone, it is not something to be feared.

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Blythe Edwards is an intern at the Institute for Economic Affairs