Is this the end of free movement?

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What the new Migration Advisory Committee (MAC) report and its recommendations might mean for businesses

In July 2017 the government commissioned the MAC to write a report on migration from the European Economic Area (EEA) to the UK. The report was published on 18 September 2018 and examines the historic impact of EEA migration on six key areas: the labour market; productivity, innovation, investment and training; consumer and house prices; public finances; the allocation of public resources; and effects on communities. It found that the overall economic impact of EEA migration has been relatively small.Where migration has had a beneficial impact, this has generally come from high-skilled migration while lower-skilled migration has had a mildly negative impact on UK-born workers.

The general recommendation that jumps out in the report is that there should be no difference between the rules governing the ability of EEA and non-EEA citizens to settle in the UK, unless this is subject to an agreement with the European Union (EU). The report also recommends that future migration policy should provide greater access for higher-skilled workers and should limit access to lower-skilled workers. The cabinet has since indicated its agreement with this recommendation for parity between EEA and non-EEA citizens, with preference given based on skill level. Indications have been made that the existing Tier 2 system could either be extended to cover EEA workers or used to provide a template for a new work permit scheme.

For lower-skilled workers the MAC report suggests:

  • There should be no specific employer-led sector-based work migration route for lower-skilled workers, apart from seasonal agricultural workers
  • An expansion of the Tier 5 (youth mobility) scheme subject to close monitoring
  • A seasonal agricultural workers scheme with employers required to pay a higher minimum wage or an Immigration Skills Charge in order to increase productivity.

Following the publication of the MAC report, home secretary Sajid Javid acknowledged that there will still be a need for low-skilled workers to come to the UK post-Brexit and that a new system will be created for these workers in certain sectors such as agriculture, social care and hospitality.

If the report is implemented almost in its entirety (albeit with additional provisions for some low-skilled workers) this will likely have significant consequences for companies in the UK. With the abolition of free movement from the EEA, most future high-skilled EEA workers will have to apply for a Tier 2 (General) visa. This will result in an increased workload for the Home Office resulting in delays for all. Companies should anticipate higher costs and an increased level of administrative work.

Organisations should consider reviewing their use of the Tier 2 visa category, including ensuring that they are currently in compliance with all of their requirements as existing sponsor licence holders. They may wish to apply to become a sponsor licence holder if they do not currently hold a licence, or prepare to expand their sponsorship under this (or a similar) system. Training of additional HR personnel in the use of the online Sponsor Management System might also be wise.

Companies looking to recruit lower-skilled workers may face a shortage of experienced potential hires, due to the proposal to fill non-agricultural roles with applicants via an expanded youth mobility scheme or who are in the UK as a result of family migration. As companies have no influence over family migration levels, they may wish to examine their employment of such workers in the UK and consider whether these roles may be re-categorised under an expanded Tier 2 category. For positions that would not fall within Tier 2, companies may want to consider alternative business models such as investing in greater automation or offshoring some of these roles.

In all cases, businesses should reassure their existing UK-based EEA workers that they are prepared for changes to the current migration system. To this end they could provide EEA employees already in the UK with information about the new EU Settlement Scheme.

Claire Nilson is an immigration counsel, and Philip Novak is a trainee solicitor at Faegre Baker Daniels

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