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This article appears in the December 2018 edition of Valemus Law's THE BRIEF, a monthly email newsletter containing the latest legal news and opinion from our lawyers. To download your copy, please click on the button above. To subscribe to our monthly news round-ups, please email info@valemuslaw.com with 'Subscribe to The Brief' in the subject line.

Government publishes White Paper on the UK’s future skills-based immigration system

Reproduced by kind permission from Practical Law


On 19 December 2018, the government published its long awaited White Paper on the UK’s future skills-based immigration system, post-Brexit. This update focuses on the implications of the proposals from a business immigration perspective.

The White Paper has been eagerly anticipated since the Migration Advisory Committee (MAC) published its final report on EEA migration (MAC report) in September 2018. Despite considerable concern that the publication of the White Paper would be postponed at least until after Parliament’s vote on the draft Withdrawal Agreement between the UK and the EU (now scheduled to take place in the week commencing 14 January 2019), political pressure has led to its earlier publication.

The White Paper assumes the implementation period provided for under the draft Withdrawal Agreement will run until 31 December 2020, with proposed visa routes to be published in the Immigration Rules in autumn 2020. The White Paper does not set out the Government’s proposals in the event of a no-deal Brexit.

The Government has stated that it will continue to engage and consult on key aspects of the new immigration system for the next 12 months.

Key provisions

The White Paper makes it clear that the Government has accepted many of the recommendations of the MAC report. The key provisions of the White Paper include the following:

  • Freedom of movement will end on 31 December 2020.
  • The Government will aim to reach reciprocal agreements for short-term visits and intra-company transfers between UK and EU companies.
  • The same UK immigration rules will apply to all migrants from 2021 and the government will continue to work to reduce net migration to “sustainable levels”.
  • Skilled and highly-skilled migrants’ applications will be considered under Tier 2, which will be further reformed. The White Paper states that the skills threshold will be lowered, the resident labour market test will be abolished and the annual cap of 20,700 will be removed. However, the decision on salary threshold for sponsorship has been put back for further consultation.
  • Certain routes under Tier 2 will lead to settlement.
  • Employer sponsorship will be on a lighter-touch and more straightforward basis, so that in most cases, the aim will be for employers to recruit migrant workers in two to three weeks.
  • A temporary worker route will be available as a transitional measure for lower skilled jobs, for up to 12 months at a time, with a 12-month cooling off period to prevent further applications for leave, and no requirement for sponsorship. This route will have conditions restricting access to public funds, switching and making applications to extend, and will not lead to settlement. A full review of this route will take place in 2025.

End of freedom of movement

Free movement will end on 31 December 2020. This means that all nationals, including EU nationals, will require permission to live, work and study in the UK from 1 January 2021.

However, the Government has repeated its stated aim to preserve visa free travel for short-term visits, including for tourism and for business. This may be achieved by simply adding EU countries to the list of non-visa national countries or by creating a new category for visa-free travel to the UK.

In addition, the Government will look to reach reciprocal agreements with the EU to enable UK and EU companies to post workers into the UK and into the EU for intra-company transfers.

EU citizens wanting to stay in the UK beyond the end of the implantation period will need to apply for settled or pre-settled status under the EU Settlement Scheme. This is due to open more widely for applications on 21 January 2019.

A unified immigration system

The White Paper contains rhetoric of an intention to create a unified immigration system, with the same UK immigration rules applying to all migrants. However, the future rules are also said to be expected to be “flexible and provide for different treatment for certain migrants”. This suggests that some difference in treatment may be expected where international or bilateral agreements are struck with international trading partners.

The government will consult businesses and stakeholders for the next 12 months on the proposed immigration rules that will implement the new system. The new rules are expected to be in place by autumn 2020.

The government will continue with its stated aim to reduce net migration, but this is now expressed as reducing net migration to “sustainable levels” rather than to below 100,000.

Skilled and higher-skilled workers under Tier 2

Employers who wish to recruit skilled migrant workers will need to sponsor them, primarily under Tier 2 of the points-based system.

However, the following discrete changes will be made to Tier 2:

  • The annual cap on new hires of 20,700 will be removed.
  • The annual cap applies to certificates of sponsorship (CoS) that are currently referred to as restricted certificates of sponsorship. The annual quota is allocated on a tapered monthly basis over the financial year (6 April to 5 April). This change will likely mean that all CoS will be “unrestricted” and the end of the monthly restricted CoS allocation process. Currently, unrestricted CoS are only available for higher earners (those earning £159,600 gross a year or more), for those eligible to switch in to Tier 2 from within the UK and those making an application to extend their current leave under Tier 2 for the same job with the same sponsor. This should speed up the process of recruiting a migrant worker in many circumstances and reduce burdens on the Home Office.
  • The resident labour market test (RLMT) will be abolished.
  • This means that employers will no longer need to factor into the recruitment process a Home Office mandated recruitment exercise before sponsoring a skilled migrant worker. This should also serve to speed up the process of recruiting a migrant worker in many circumstances and reduce the burden on the Home Office.
  • The MAC is due to report on the effectiveness and suitability of the current Shortage Occupation List in March 2019. Given the prospective abolition of the RLMT, it is unclear how the SOL would feature in sponsorship from 2021.
  • The skills threshold for Tier 2 will be lowered from Regulated Qualifications Framework (RQF) level 6 (degree level) to RQF level 3 (A-Level).

This will dramatically increase the number and type of jobs that will qualify for sponsorship (see Appendix J to the Immigration Rules for a list of jobs and their considered skill level). Importantly, the government has shied away from wholeheartedly supporting the MAC recommendation that the minimum salary threshold under Tier 2 should be £30,000 gross a year. It has been reported that this proposal faced opposition from within the Cabinet and the threshold will now be set following addition consultation and engagement with businesses and stakeholders over the next 12 months. Critics have also claimed that this proposal, with no regional variation, favours London and the South East where higher salaries are paid on average compared to the rest of the UK.

Additional significant points of interest are that students (at bachelor’s level or above) will have:

  • Post-study leave of six months (masters’ and bachelor’s level) and 12 months (PhD level).
  • The ability to switch (so apply in-country) into skilled work three months before the end of their course and to apply for leave to enter the UK (from outside the UK) for two years after graduation.

Settlement under Tier 2

The White Paper refers to certain routes under Tier 2 leading to settlement. This is likely a reference to the difference between Tier 2 (General), (Sportsperson) and (Minister of Religion) on the one hand and Tier 2 (Intra-Company Transfer) on the other. Currently, migrants under Tier 2 (Intra-Company Transfer) cannot generally apply for settlement.

Given the proposed continued discussion about the salary threshold, there may also be changes to the levels of salary required for settlement under Tier 2 (currently £35,500 gross a year and due to rise to £36,900 for applications made on or after 6 April 2021 and to £37,900 for applications made on or after 6 April 2022).

Streamlined sponsorship

It is clear that under the new proposals Tier 2 will become the main route through which European nationals will apply to enter the UK for work from 2021. Therefore, the Government has recognised that more employers are likely to require sponsorship licences to meet their recruitment needs.

The White Paper sets out a commitment to reducing the administrative and financial costs of sponsorship, by making it more straightforward and a lighter touch system. The upshot is that employers should be able to sponsor a migrant worker in two to three weeks in most cases, which is a significant reduction in the overall time. Currently, where a RLMT and restricted CoS is required, the process can easily take two to three months.

To assist with this, the White Paper suggests that migrants from certain “low-risk” countries (such as Australia, New Zealand, USA, Canada and South Korea) may be able to switch into Tier 2 whereas currently they would be required to apply for leave to enter from abroad. It is not clear which categories of migrants this will apply to, but it could be extremely useful if it applied to visitors or those in the UK under Tier 5, for example.

Transitional scheme for lower skilled workers

This scheme picks up a recommendation from the MAC report to extend the current Youth Mobility Scheme (YMS) under Tier 5 to EU nationals.

The proposal is for a 12-month grant of leave for work for nationals of low-risk countries, with a cooling-off period of 12 months (meaning they cannot apply again under the route for 12 months after the migrant has left the UK with permission under this route).

This route would be subject to restrictions on:

  • Access to public benefits.
  • Bringing dependants.
  • The ability to make an application to extend or to switch into other routes (whether this is for work or otherwise is unclear).
  • The ability to apply for settlement with leave under this route.

Critics have questioned why migrants under this category will be unable to access public funds, particularly as they will be paying tax on their UK earnings to fund such benefits.

This route will be reviewed in 2025. It is unclear if this route is to sit alongside Tier 5 YMS or to replace it.

Tier 1

The White Paper does not provide any firm proposals on the future of Tier 1. However, it refers to the start-up visa route (announced by the Home Secretary in June 2018), labelled as an “innovator route”, and to continued reform of the routes under Tier 1.

Maintaining the Common Travel Area

The White Paper maintains the Government’s commitment to the Common Travel Area and freedom of movement between the UK and the Republic of Ireland.