6:25 PM 4th December 2023
Migration Changes Will Cause Concern For Businesses Already Struggling To Recruit
Photo by Krzysztof Hepner on Unsplash
[Responding to Home Secretary James Cleverly’s announcement on changes to legal migration rules, Alexandra Hall-Chen, Principal Policy Advisor for Sustainability, Skills and Employment at the Institute of Directors, said:
“Today's announcements will cause concern among businesses already struggling to recruit the labour they need
. We know that skills and labour shortages continue to be one of the top pain points for businesses in the UK, with 39% of business leaders citing skills shortages as negatively affecting their organisation in a November IoD poll.
“Continued tightness in the UK labour market is feeding inflation and is a key reason that interest rates remain high. Without measures to increase domestic labour supply, policies designed to restrict businesses' ability to hire overseas workers risk worsening inflation and holding down economic growth.”]
Matthew Percival, CBI Future of Work Director, said:
“Businesses support the government's objective to focus on productivity growth as the long-term answer to labour shortages.
“However, inflation-busting increases to minimum salary requirements and charges won’t address the shortages that are currently holding back business investment and growth.
“Businesses strongly support the Shortage Occupations List and, if used correctly, it remains an important tool to help reduce acute labour gaps. They will also back the government’s decision to close the loophole that could allow firms to use foreign labour to undercut the salaries of UK workers.
“An honest conversation about immigration would focus on how visa rules best support economic transformation and sustainable growth, beyond short-term fixes.”
Adam Williams is a partner at city law firm DMH Stallard and a business immigration specialist.
"With the changes tabled to be introduced in the Spring of 2024, I think we will likely see in a spike in the numbers of workers applying to come to the UK in the short term, as employers and visa applicants scramble to get applications in before the changes bite.
"The true impact of these reforms may therefore not be felt for many months yet, and indeed may be preceded by a general election.
"The increase by over £10,000 in the general salary threshold for the Skilled Worker visa, is understandably the headline grabber, but there was an indication that those coming on Health and Care visas will be exempt from this. And it is the removal of the 20% salary reduction for roles on the Shortage Occupation List, combined with the ban on dependent family members coming to the UK to accompany Health and Care visa holders, that is understandably concerning big employers in the sector.
"The Home Secretary believes that these reforms (including limits on Student dependant visas) will reduce the number of legal migrants coming to the UK by 300,000.
"But what’s not clear, yet at least, is what measures are to be taken as part of a co-ordinated plan to 'build up our domestic workforce', to plug the seemingly inevitable increase in the shortage of workers to serve the UK’s health and social care sector.
"The Shortage Occupation is not dead, as some predicated, but it will be subject to review with a clear intent to reduce its size, and Mr Cleverly made reference to a linked 'salary list', but it is not yet clear what the pay requirements of those roles that remain, will actually be - other than that Health and Care visa holders will be exempt from the new £38,700 minimum salary threshold.
"The graduate route will also be reviewed by the Migration Advisory Committee – with an inference that 'abuse' (possibly in the form of dependant applications) may be in the frame here too.
"We have seen quite radical reforms at times over the last 10- 15 years as part of the so-called 'hostile environment' to bring down net migration, but the dismantling of the long-standing connection between main visa applicants and their family members on such a large scale is new and profoundly different.
"The Home Office has stated that it believes applicants without dependents will be ready to apply and take the place of those who don’t wish to leave their families behind them. That is an experiment for which we may or may not see the true results, depending on the timing and result of a 2024 general election."