The UK’s Points-Based Immigration System – a techUK analysis

Yesterday, the Home Office unveiled its plans for the UK’s points-based immigration system (unceremoniously dropping reference to Australia). The policy statement sets out a new vision for UK immigration policy – one where there is no preference based on geography (EEA nationals will be treated the same as rest of world) and a clear preference for high-skilled, high-wage workers. This marks a radical change all which is to be built and implemented by 1 January 2021 – only ten months away.

At the heart of the policy statement is STEM talent with explicit mention made of the need to attract those with specific STEM skills. For the tech sector there are many elements in the policy paper that we can welcome. For example, removing the arbitrary cap on talent and the decision to cease use of the Resident Labour Market Test, both of which will allow the sector to continue to thrive. The support for research and innovation is further underlined in the Government’s commitment to the Global Talent visa and the return of the post-study work visa for students.

Taking a wide-lens view, what is clear is this Government will use sticks as well as carrots to get Britain automating. A number of references in both the policy statement and the Home Secretary’s comments seem to suggest the answer to closing down low-skilled immigration routes is to automate and digitise processes. On this point, techUK would sound a note of caution. The UK absolutely does need to make greater use of digital technologies in the workplace – they save time, money and will increase productivity and growth. But the implementation of these new technologies takes time and requires a change in culture at the leadership level and an acceptance from the workforce. Ten months doesn’t seem all that long…

But back to the detail of the policy statement - so what does a points-based system mean for the tech sector?

 

Points-based system for skilled workers

Skilled migrants coming into UK will need a job offer from an approved sponsor, meet the minimum appropriate skills threshold of A-level or above, have a salary of at least £25,600 a year or £20,480 for an occupation with staff shortages and speak English. People can also come with a job offer at £20,480 if they have a PhD relevant to the job or in a STEM subject relevant to the job. A total of 70 points is required to be eligible to apply.

Whilst the tech sector is generally a high-paying one, we welcome the Government’s decision to take on board the MAC’s recommendation to lower the salary threshold. However, as we know salary is not always a proxy for skill – or need. For example, the Government has made ambitious manifesto commitments on housing and broadband. If these commitments are to be met the Government will need individuals working on projects that perhaps fall under the salary threshold. The big question then becomes will pragmatism beat policy?

English Language requirements

Pragmatism certainly hasn’t won the day when it comes to English language requirements. Yesterday’s policy statement and media appearances by the Home Secretary made it absolutely clear – if you want to come to the UK to work (skilled or otherwise) you will be required to speak English. However, there is no indication of how levels of English will be tested, what the standard will be, and whether this will be regulated. This is compulsory criteria for entry but techUK believes this should be determined by the employer (as a job offer is already required) and not by an arbitrary test.

Costs

Currently for non-EEA citizens and their prospective employer, applying for a UK visa can be confusing and overwhelming. The current system is fragmented and there are a plethora of different charges and add-ons which they have to pay which can act as a deterrent in hiring talent. In addition to salary costs, total costs including getting a sponsor licence, the visa, Immigration Skills Charge and Immigration Health Surcharge make recruiting overseas workers more challenging.

There is often reluctant acceptance of the skyrocketing prices of visa as companies need to hire international talent, but this is contingent on the size of the company. Tech SME leaders in techUK’s membership described recruiting non-EU staff as a “significant investment” and “beyond their capacity”. For those small companies who currently have avoided the Tier 2 system, instead relying on talent they will need to significantly adapt to the new system – first gaining a Certificate of Sponsorship to allow them to bring in international talent and then navigating what can be a complex system.

Simple visa fees for the UK are already significantly more expensive than for other EU tech hubs. For example, for one techUK member, it costs six times as much to get a UK visa as it does to get a visa for their offices in competing EU city, even before we consider dependents or other associated costs.

When these costs are applied to EU hires it will become significantly more expensive to build teams in London than in cities like Berlin, Barcelona or Stockholm. techUK wants to see a simplification of fees and processes for both employers and individuals, with members proposing implementing a ‘manage my visa/application’ function in the system where applicants can see the process made and the fees accumulated, to make this process more manageable and transparent.

There is no information on how much the visa application process will cost but the paper outlines that the Immigration Skills Surcharge on employers and the Immigration Health Surcharge on migrants will remain on the same basis as now. To ensure the UK remains at the forefront of innovation, techUK would like to see the Immigration Skills Charge revised. Providing transparency as to where the money is going for the Skills Charge would provide employer confidence in a future immigration system. At the moment, PhD level roles are exempt from Immigration Skills Charge – a provision that is important to the STEM sector and should be maintained.

 

So what's next?

The Government’s ambition to commence the new system in ten months leaves business very little time to prepare. techUK would urge the Government to move quickly to put in place support structures for businesses – particularly SMEs who currently may not possesses the right administrative permissions or capacity, to help them engage and navigate the new system. Government must give businesses time and support to adapt to a new system. 

 

A streamlined approach is necessary

techUK welcomes Government’s commitment to streamlining the Tier 2 visa system. At the moment it is too cumbersome and clunky for employers and employees with lots of pain points. Tech talent is in huge demand globally so any and all friction makes the UK less attractive.

The visa process is expected to be “streamlined” to reduce the time it takes to bring a migrant into the UK by up to eight weeks—down from 23 weeks. This points-based system could be an opportunity to simplify this and other migration routes, given the large capacity pressure the system will now face processing EU migrants. With IT roles accounting for 35% of all Tier 2 applications for the year ending June 2019, a new approach will be needed—one that has significantly less friction to ensure that businesses can quickly access the talent they need.

Underpinning any immigration system is the need for trust and public confidence. We believe that this will be delivered by a high-quality system that works and is well understood by individuals and employers alike. As the Government builds the future immigration system it is vital that efficiency and effectiveness are central pillars.

 

Digital first solutions

Applications for the new visa system will be made online. techUK wants to ensure that Government has reliable and quality tech solutions for the future immigration system that are consistent across the entire system. The EU Settlement Scheme demonstrates that a simple and streamlined process is possible.

 

Many unanswered questions remain

Building and implementing a new system in ten months will require a lot of work and gives businesses not much time to prepare. Government will need to offer support to help business get ready – particularly SMEs who may have relied solely on EU talent to date. Government will need to continue to consult with businesses to ensure to ensure a smooth transition to the new system. techUK looks forward to continued communication and engagement with the Home Office.

techUK members are making significant investments to skill the domestic pipeline of future tech talent and their current workforce but there is an immediate need for skilled labour in the sector. Data shows that the UK’s digital and tech sector continues to be an economic bright spot, outperforming the economy at large, growing six times faster than the wider economy. The UK must remain open and attractive to foreign innovators, investors and the talent that supports that ambition.

  • Nimmi Patel

    Nimmi Patel

    Policy Manager | Skills, Talent and Diversity
    T 020 7331 2014
  • Vinous Ali

    Vinous Ali

    Associate Director for Policy
    T 07595 410 658

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