The Government's response to the Migration Advisory Committee report on Tier 2

Posted: 07/04/2016

Earlier this year we reported on the Migration Advisory Committee's (MAC's) recommendations on changes to the Tier 2 route. The Government has now announced the changes it intends to make to the route. These will largely be introduced in two stages, with the earlier changes being effective from autumn 2016.

Whilst the Government has taken note of the concerns raised by member organisations and business leaders and has decided against implementing some of the more restrictive measures which would have impacted UK businesses, it is disappointing to see that the changes will increase the costs of hiring overseas talent. Such costs, which include higher salary levels and the introduction of an immigration skills charge, will no doubt impact start-ups, in particular those in the technology sector already facing skills shortages.

In addition, the Government took on board the MAC's recommendation not to change work rights for dependants.

Changes from autumn 2016

There will be an increase in the Tier 2 (General) salary threshold to £25,000 for experienced workers, maintaining the minimum threshold of £20,800 for new entrants.
Taking into account the lower salaries paid in certain sectors and the need to attract certain skills, there will be exemptions from the increased Tier 2 (General) experienced worker salary threshold for nurses, medical radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin. The exemption will however end in July 2019.
There will be an increase in the salary threshold to £30,000 for the Tier 2 (ICT) Short Term category.
There will be a reduction in the salary requirement for the Tier 2 (Graduate Trainee) category from £24,800 to £23,000; in addition there will be an increase in the number of places available to companies from five to 20 per year.
The Tier 2 (ICT) Skills Transfer category will be closed to new applications.
Overseas graduates will be weighted more heavily in the Tier 2 (General) monthly allocation rounds, although details of how this will apply are yet to be announced.
The exemption from the Immigration Health Surcharge for the Tier 2 (ICT) category will be removed.
Nurses will remain on the shortage occupation list but employers will need to carry out a resident labour market test before recruiting a non-EEA nurse.

Changes from April 2017

There will be an increase in the Tier 2 (General) salary threshold to £30,000 for experienced workers.
The Tier 2 (ICT) Short Term category will be closed to new applications and all Tier 2 (ICTs) (except graduates) will need to qualify under a single route with a minimum salary of £41,500.
The introduction of the Immigration Skills Charge (ISC) for Tier 2 sponsors. This will be £1,000 per migrant per annum (£364 for small businesses and those in the charitable sector). An exemption to the charge will apply to PhD-level jobs and international students switching from Tier 4 to Tier 2 (General).
There will be a reduction in the high-earners’ salary threshold for Long-Term Tier 2 (ICTs) from £155,300 to £120,000.
The one year experience requirement in the Long-Term Tier 2 (ICT) category will be removed where the applicant is earning over £73,900 per annum.
A waiver for the resident labour market test will be introduced and prioritisation will be given to Tier 2 (General) places where the visa grant(s) is in support of the relocation of a high-value business to the UK or, potentially, an inward investment project. Details of who will qualify under these criteria are yet to be announced.
There will be a review of allowances under the Tier 2 (ICT) categories, which may result in some changes to the type and amount of allowance which can be amalgamated with the base salary, in order to meet the minimum salary threshold.

MAC recommendations which are not being introduced

The Government has stated that:

Tier 4 students switching to a Tier 2 visa will not be subject to a limit on numbers and their sponsor will not have to carry out a resident labour market test. This is welcome news for the university sector as placing restrictions on Tier 4 students switching in-country would have further reduced the number of international students coming to the UK.
It will not implement the MAC’s recommendations that ICTs should be required to have worked for their company for two years, rather than 12 months, or that transferees working on third party contracts should be restricted to a separate category.

Only a summary of the changes has been announced, with the detail on some of the recommendations still to follow. We will keep readers updated as further information is published. In the meantime, please contact a member of the immigration team if you would like to discuss the changes.

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