Time to prepare for the 2021 Immigration System

It now seems certain that the UK will leave the European Union on 31 January 2020. The remaining 11 months of this year will be a transition period with current European law and free movement remaining in place. During this time the British government will attempt to negotiate a trade agreement with the EU to define our future relationship.

As free movement ends, new provisions under the Immigration Rules are required to define the terms of entry and residence for European nationals seeking to enter the United Kingdom post transition. The Home Office have taken the necessity to make provision for European nationals as an opportunity to overhaul the domestic immigration system. It is anticipated that 2020 will see dramatic changes announced with the new system expected to be introduced on 1 January 2021 and with some elements, including changes to sponsored work being phased in during 2020.

We will consider the proposals for the 2021 immigration system and the steps employers may wish to take to prepare. We will follow developments closely and will be reporting on further changes as they are announced.

Fundamentals of the 2021 Immigration System

It is anticipated that there will be three broad work visa categories under the 2021 immigration system;

1. Skilled employees

Sponsored skilled workersThis is where we will see the most fundamental changes. The most significant being the inclusion of European nationals into the immigration system. For the first time many businesses who have relied on a European workforce will need to understand the requirements of the Immigration Rules to recruit any overseas nationals, including Europeans.

The current system of sponsorship under Tier 2 requires satisfaction of a skills threshold and salary threshold. Overseas applicants are subject to a cap on numbers and in most cases resident workers must be prioritised and must be recruited rather than an overseas national if they are suitable for the role.

The skills threshold is likely to be reduced from graduate to A' level with the government confirming in 2018; 'We have noted, and agree with the MAC's recommendation that workers with intermediate skills make a positive economic contribution. We accept that they should be given entry to the UK labour market if employers require them. In future it will be open to workers from all countries, not just the EU'

This will open up this route to many more professions. It had been proposed that the salary threshold would remain at £30,000. In September 2018, the Migration Advisory Commission's (MAC's) recommendation was to “maintain existing salary thresholds for all migrants under Tier 2 (General)”. This was only partially adopted in the White Paper of December 2018 and was one of the most controversial aspect of the new proposals. Responses received by MAC from Universities UK and the NHS indicate opposition to the maintenance of the current salary thresholds. In July 2019 the five largest business organisations and around 30 trade organisations warned the government that more than 60% of jobs in the UK carry salaries of below £30,000 and that this threshold would reduce access to the labour and skills needed to support the economy.

The MAC has been further tasked with considering salary thresholds and the level at which they could be set. They are due to report by the end of January 2020. Early reports from government sources indicate a willingness to agree to a lower salary threshold. The suggestion of a lower salary threshold has been welcomed by cross sector business groups.In the 2018 White Paper dealing with the future skills-based immigration system, Theresa May's government indicated their alignment with MAC's recommendation to abandon the cap on visas and to abandon the resident labour market test. The cap and resident labour market test were intended to act as mechanisms to protect the employment opportunities of resident workers. MAC considered that there were better mechanisms for achieving this, such as the Immigration Skills Charge and appropriate salary thresholds. It was implicitly recognised that these mechanisms have made the visa process slow and cumbersome, in contrast, the White Paper proposed that “UK employers will be able to be nimble when competing on the international stage for the very best global talent”.

If the skilled sponsored worker route is adapted as proposed, this should make the 2021 immigration system more attractive for employers and will enable British businesses to recruit the right people into roles without being overly constrained by immigration requirements.

2. Innovators

Investors, innovators, start-ups and exceptional talent

As with the current immigration system, there will be visas available for those wishing to make significant investment in the UK, those wishing to set up a business and those who are recognised as leaders or potential leaders in their field of expertise. As these routes were overhauled last year, it is not anticipated that there will be further significant change. The present model of requiring Designated Competent Bodies to provide an endorsement to an applicant prior to an application for entry clearance or leave to remain is likely to remain.In August 2019, Johnson announced his intention to establish a new fast track visa for scientists and researchers stating that he wanted the UK “to be the greatest place for science”. This will be an extension of the Tier 1 Exceptional Talent route. This route does not require a job offer and provides for accelerated routes to settlement. In December 2019 it was announced that access to the accelerated route would be widened with a near doubling of the number of eligible fellowships.

3. Temporary work

Sector specific, temporary work and youth mobility

Sector specific

One of the key concerns for certain sectors is around recruitment and retention of a suitable workforce post-Brexit. It is anticipated that certain sectors, including the healthcare sector and agriculture, will be acutely affected. Industry bodies also anticipate that highly skilled sectors such as digitech, engineering, architecture and higher education will struggle and sectors with a historic and current reliance on a European workforce such as hospitality, manufacturing, construction and care will find it difficult to meet their workforce requirements.

 NHS - fast track

In the background briefing notes to legislation proposed in the Queens Speech following the December election, the government proposed a fast track NHS visa scheme with reduced fees in an attempt to address acute labour shortages across the NHS. It is widely considered that this alone will not substantially address the issue.

 Agriculture

A pilot for the Seasonal Agricultural Workers Scheme has been running since February 2019 and will continue to the end of December 2020. The government has proposed increasing the annual quota for the Scheme from 2,500 to 10,000.Many sectors are concerned that the provisions will not be adequate to compensate for the loss of a readily available European workforce. In line with the agricultural sector scheme, the government will consider further sector specific schemes and will likely look to the MAC to make recommendation for this schemes should they be considered necessary to meet labour market shortages. 

Low skilled

There is very limited provision for low skilled workers in the proposals for the 2021 immigration system justified on the basis that these roles will be filled by the resident workforce and limited immigration provision. In the 2018 White Paper, provision for an expansion of the youth mobility scheme, a new temporary short-term worker route and more generous leave entitlements for international graduates following the conclusion of their studies in the UK were proposed. It was suggested that these schemes could help to meet labour market shortages post-Brexit.

These schemes will not lead to settlement.  The short-term worker route may only be available to nationals of certain countries. It is likely to be limited to 12 months with a 12 month cooling off period, although there has been wide industry consultation on the most effective duration for this visa category. This proposed visa is intended to act as a buffer to enable businesses to adapt to a post-Brexit environment and may be phased out in 2025.

Post study work

In a departure from May's 2018 White Paper immigration proposals, Johnson announced the introduction of a two year post study work visa.Industry bodies have raised concerns that even taken together these schemes will not provide sufficient labour resource nor will they enable resource to be focussed in the sectors and geographical regions with the most acute shortages.

Australian style points based system

In his election manifesto, Boris Johnson promised to deliver an Australian style points based system. Following the election one first steps taken by the Johnson Government, with Priti Patel as Home Secretary, was to commission MAC to report on how an Australian style points based system would work in the UK after Brexit.

The Australian PBS allows for the selection of a potential migrant on the basis of their score against a number of criteria, including time in skilled employment, qualifications, age and the skills of their partner/spouse. Potential migrants submit an Expression of Interest. Those with the highest scores are placed in a pool of potential applicants. They may then be invited to apply for a visa. This is a protracted process with applications taking on average 20 months to complete. The Australian government is able to influence the numbers of potential applicants for shortage occupations in the pool by increasing or decreasing the threshold scores for given occupational sectors, for example by decreasing the threshold for health professionals more people with relevant experience would move into the pool. It is not a requirement for potential applicants to have a job offer, this is simply one of the points scoring criteria. From the information we have to date, it appears that the Government is not proposing to introduce the Australian PBS in its purest form to the UK as most routes in the UK system will require a job offer. The intention appears to be to revamp our existing system taking some influence from the Australian system.

Our current PBS is points based in name only. In reality, our system is based on satisfying prescribed criteria. If the criteria is satisfied, a visa is issued. If not, an application is refused. In contrast, it is anticipated that a rebranded 2021 PBS would enable an applicant to make up a deficit in one points scoring area with an excess of points in another scoring area. The points scoring areas the MAC are considering include language proficiency, having studied in the UK, work experience, age, educational attainment, having a job offer, willingness to work in areas or sectors with a shortage of workers and salary. It is expected that it would be possible to offset a low salary, for example, with a willingness to work in a geographical area in which there was an acute difficulty in recruiting into a given sector. This report is expected to be published at the end of this month. We will be reporting on its publication as soon as this is announced.

Simplification

The Home Office aspires to a system which is “as smooth and seamless as possible, enabling UK businesses to compete for global talent, to complement, not substitute for, the talent available in the UK labour force” In January 2019, the Law Commission mooted recommendations to simplify the Immigration Rules. On 14 January 2020, the Commission published its final report making sweeping recommendations to make the Rules suitable for non-expert users, clear and accessible. It is anticipated that many of the recommendations will be taken into account by the Home Office when designing the 2021 immigration system. Sally Weston Head of Legal Strategy at the Home Office has confirmed that the Home Office intend to redraft the entire body of Immigration Rules which provide the legislative framework for routes into the United Kingdom for overseas nationals. The intention is to draft the Rules in a consistent and comprehensive manner, while incorporating the significant changes expected to the provisions for visas for employment. This is a significant challenge particularly as the Home Office hope to utilise technological innovations to streamline their back of house and user facing systems.

Digitisation and Automation

The Home Office propose to use the architecture of the EU Settlement Scheme to inform the re-design of the entire immigration system. In particular, there is a commitment to move to digital status held online which can be shared with employers, landlords, health providers and banks when evidence of immigration status is required. There is recognition that a huge challenge faces businesses who have never engaged in the immigration system before now. The Home Office hope to design and implement a system that “takes into consideration, the challenges facing small businesses who haven't had to previously engage with the current high skilled route”. The 2018 White Paper and statements made by senior Home Office policy makers reveal an aspiration to make better use of data from other government sources at the application stage and in monitoring compliance. As with the EU Settlement Scheme, it is proposed to integrate sources such as HMRC tax records to auto-assess elements of an application and to identify compliance with salary thresholds, for example. It is also proposed that the application process will be streamlined with the current duplication being stripped out. MAC has noted previously that “problems with the administration of Tier 2 (General) are raised at almost every meeting the MAC has with employers”. The aspiration for a streamlined, light touch process stems in no small part from the Home Office's recognition that the current system will buckle once European nationals and the employers of Europe nationals are required to engage with the licence and visa process. There are concrete proposals to reduce bureaucratic inefficiency and the burden on employers will be reduced if the proposals to abandon the resident labour market test and visa cap make it to the final cut. The Home Office does intend to “continue to test most, if not all, of the current requirements which demonstrate a sponsor's direct relationship with a worker”. For all the stated intentions, it is not anticipated the new system will be easy for an employer to navigate. The Home Office wish “to ensure that overall, when the new single system is in place, the burden on businesses is no greater than it is at present”. This is not hugely reassuring given the track record and reputation of the present system being particular onerous and burdensome.

How can businesses prepare?

Since the publication of the White Paper over a year ago many businesses have been so focussed on the Brexit process that they are yet to turn their attention to the new immigration system. With only 11 months, at the time of writing, to the introduction of the new system, it is imperative that businesses begin to focus on the implications of the new 2021 immigration system. If your business has recruited anyone from overseas, including EU nationals, and anticipates doing so again, the new immigration system will apply. If the business has not yet taken this step, 2020 is the year to identify your European and European family member employees and to support them in securing Settled Status. They need to have status in place before the end of the voluntary period at the end of June 2021, but ideally before the end of free movement in January 2021.

The business should plan its recruitment strategy with the 2021 immigration system in mind. Securing an immigration licence should be close to the top of the list as a key task in 2020. Licences last for 4 years. There is likely to be a significant spike in licence applications as we hit the second half of 2020. Securing a licence now enables a business to remain quick footed and ahead of their competitors. When securing a licence, a business should receive comprehensive training for all employees and senior management who will be involved in recruitment practices. Talk to us about our training packages. The business can request regular free updates from Freeths. We will be briefing our clients on the development of the 2021 immigration system as announcements are made during 2020. You do not have to be a client to receive these briefings.

You can submit a request to emma.brooksbank@freeths.co.uk.

If you would like our support with any immigration matter, including preparation for 2021, you should not hesitate to contact Emma Brooksbank by emailing emma.brooksbank@freeths.co.uk.