Cutting migration without upskilling British workers will be an economic disaster
Without radical changes to how we train domestic workers, disincentivising skilled migration will harm the economy, says Zoe Jacob
The government’s White Paper on ‘Restoring Control over the Immigration System’ has caused consternation among immigration professionals. This resistance is driven by the strength of the language used – in his foreword, the Prime Minister states that the “damage [high net migration] has done to the country is incalculable” and describes the extent of migration over the last decade as a “wound”. While the government is of the view that the White Paper promotes growth, there is a strong argument that it does the opposite. Migration which fills the gaps in the domestic labour market and encourages an inflow of wealth into the UK is necessary for economic growth.
The government promises sweeping changes to the UK Immigration system, many of which restrict the inflow of labour into the UK. The Skilled Worker visa route will be restricted to those at graduate level or above and the Health and Social Care route will be closed to all overseas applicants. English language requirements will be introduced for all migrants (including dependants), with a higher threshold for skilled worker migrants. Furthermore, the time it takes for most migrants to obtain permanent residence in the UK will increase from five years to 10 years, unless they can “earn the right to privileged immigration status … through the longer-term contribution they bring to our country”. What this contribution will be is not specified.
If these changes are implemented, they will have an immediate impact on the UK economy. There will be a lacuna in the labour market. Who will fill the below-graduate-level jobs in construction, hospitality and the care sector that are currently undertaken by those with visas? The White Paper noticeably does not provide a concrete scheme for upskilling the UK workforce. Unless the ‘temporary shortage list’ yet to be drafted by the Migration Advisory Committee (MAC) is a reiteration of the current rules (which would be self-defeating), a labour shortage looms.
Visas for investment
Longer-term, the increased time it will take individuals to obtain permanent residence in the UK disincentivises migrants from making the UK their home. The White Paper emphasises integration as a key aim, but integration requires an environment that welcomes migrants. This proposed policy does the opposite. It is of note that the UK has some of the highest visa fees in the world. If doubling the time it takes to settle in the UK is an attempt to increase these revenues, this is short sighted, as it will likely put skilled migrants off coming to the UK at all.
The White Paper makes no reference to the reintroduction of a visa based on investment, which would encourage the world’s wealthy to relocate to the UK, despite having very recently introduced the Foreign Income and Gains (FIG) tax regime. The FIG regime specifically encourages high net worth overseas nationals to live, spend and invest in the UK for a four-year tax-free period. If there is no visa that allows these individuals to live in the UK, it is highly unlikely that this policy will be the growth generator the government predicts.
Arguably therefore, the best migration-based solution to economic growth, would be for the government to leave the current rules regarding work-based migration intact, whilst introducing an investor visa which targets investment in programs focused on upskilling the domestic workforce. It is only once we have an upskilled domestic workforce, that we can realistically start considering radical changes to the UK immigration system which disincentivise migration and restrict access to the overseas workers currently required. Failure to adopt such an approach will result in economic calamity.
Zoe Jacob is head of immigration and partner at Boodle Hatfield