Tuesday 18 February 2020 10:30 pm

Employers told to break reliance on 'cheap EU labour'

Employer groups are already pushing back after being warned that the UK’s new work visa system will block them from relying on “cheap EU labour”.

Home secretary Priti Patel will today add more detail to plans for expanding the points-based work visa system to include EU migrant workers — which will replace freedom of movement —from 1 January 2021.

The government argues it will reduce overall net migration by preventing firms from hiring low-skilled workers from the EU.

Under the new system, qualifying salary and skills thresholds have been lowered — from an average of £30,000 to £25,600, and from graduate to A Level equivalent, so that industries such as construction don’t suffer a sudden skills gap.

The system will also allow migrants to “trade” points so that workers in areas where there is a shortage — such as nurses — could qualify for a work visa even on a lower salary.

The government is keen to move away from businesses being “reliant on cheap EU labour”, one government official said, meaning hospitality staff, factory workers and cleaners will no longer be able to work in the UK, unless they have settled status.

“Businesses will now need to invest in technology and invest in staff,” the official added.

“We are not just throwing industry out there – we want to make sure we are working with them to adapt to specific concerns,” he said. “But people voted to end free movement, and there are going to be ramifications. It’s not going to be business as usual.”

Firms would have “a period of transition” to get used to the new system —but the changes would come in from the end of this year, the official said.

Ahead of the launch, Patel said: “Today is a historic moment for the whole country. 

“We’re ending free movement, taking back control of our borders and delivering on the people’s priorities by introducing a new UK points-based immigration system, which will bring overall migration numbers down.

“We will attract the brightest and the best from around the globe, boosting the economy and our communities, and unleash this country’s full potential.”

But British Chambers of Commerce head Adam Marshall last night warned that the UK’s “critical labour shortages” meant businesses still need access to workers at all skill levels, while the visa application process needed to be “radically simplified”.

Tom Ironside, director of business and regulation at the British Retail Consortium, said: “Retailers rely on complex supply chains and for these to function effectively must be able to access an adequate supply of workers.”

“Although we welcome the reduction in the salary threshold, it is disappointing that the government has not understood the needs of the economy and the vital contribution of workers supporting the operation of warehouses, food factories and city centre stores.”

However, Richard Burge, chief executive of London Chamber of Commerce and Industry, said: “Businesses will welcome that the government has set the minimum salary threshold for skilled migrants closer to £25,000, than the initially mooted £30,000.”

“They will also be relieved by the lowering of the threshold for what’s considered skilled, as well as a suspension of the cap on skilled workers.”

What are the changes?

  • UK’s points-based system will be introduced from 1 January 2021 – but this is the first point of “a journey”.
  • Skilled workers’ salary thresholds will be the higher of either the average (£25,600) or the going rate for their occupation.
  • Skills threshold will be dropped from RQF6 (graduate) to RQF3 (A level or equivalent).
  • All applicants must have a job offer, at this skill level, and speak English to a sufficient level – securing 50 out of a total 70 required points.
  • Further points are awarded for meeting the salary threshold, working in a shortage occupation, or if they have a PhD in a relevant subject.
  • From 2022, this will open this out to migrants without a job offer. Points will be based on age, experience, qualifications etc, and will impose a cap on the number.
  • The existing Global Talent route for highly skilled non-EU migrants will be extended to EU citizens. Longer term a broader unsponsored route will run alongside the employer-led system for “a smaller number of the most highly skilled workers”.
  • No route for lower skilled workers (eg hospitality, cleaners, factory staff).