General election: What should HR know about immigration proposals?

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With just one week until the general election, Kerry Garcia and Jackie Penlington examine what the Conservatives, Labour and the Liberal Democrats are proposing for immigration.

As the general election looms, the party manifestos have now been revealed. But what is in store for employers, especially from a staffing point of view? Employers would be wise to review what each of the three major parties is promising on immigration policy and consider how it could affect their teams.

Conservatives

Boris Johnson has made a personal pledge to “get Brexit done” and the UK will leave the EU by 31 January 2020 with his deal if the Conservatives win a majority in the election. The manifesto promises that there will be no further Brexit extensions.

In reality, however, formally leaving the EU is only the beginning of a long process. It is difficult to see how the transitional period for Brexit will not extend beyond its current deadline of 31 December 2020. Despite the Tories’ promise to negotiate a trade deal with the EU next year, this is an incredibly tight timescale, considering that it took seven years for the EU and Canada to finalise their trade deal.

The Conservatives also aim to end freedom of movement for European nationals by 1 January 2021 and ensure that after that date EEA nationals would have no preferential access to the UK labour market. Again, this date may be extended if the end of the transitional period moves beyond 31 December 2020.

Once free movement ends, most European nationals wishing to come to work in the UK are likely to have to qualify under the sponsorship regime. For many employers, especially those relying on low-skilled workers, losing access to European labour will be damaging to their business, as there is no plan for a long-term route for unskilled migration. This will affect certain sectors more than others – including social care, construction, hospitality and retail.

Boris Johnson has also often focused on introducing an “Australian-style” points-based system. This includes prioritising law-abiding people with a job offer, good English and good education/qualifications. He may not realise it but this sounds very much like the current sponsorship regime, in place since 2008, so it is unclear what is new here.

There is promise of an “NHS visa” for qualified doctors, nurses and other health professions who could access fast-track entry with reduced application fees. However, this is offset by a pledge to increase the health surcharge, a fee payable by the migrant for them to access the NHS. Currently set at £400 per year, plans to raise this will significantly increase the costs of sponsorship.  Employers already using the sponsorship regime will be painfully aware of the significant application fees, and further immigration costs could be prohibitive to many businesses.

On the plus side for employers, the Conservatives have finally abandoned their net migration target of 100,000 per year. However, ending free movement will undoubtedly lead to reduced migration.  Employers will face rising costs to sponsor individuals in the UK, which may well deter employers from sponsoring overseas nationals.

Labour

Labour has ruled out a no-deal Brexit and promises to renegotiate a new deal within three months, with close alignment to the single market and a new UK-EU customs union. Their manifesto promises that, once a new deal is secured, there will be another referendum, which will include the option of remaining in the EU. The referendum would be legally-binding and Labour promise to implement the outcome immediately.

If the new referendum’s result means the UK remains in the EU, freedom of movement for European nationals would continue. This would be helpful to many employers as they would continue to have unlimited access to European workers – both for skilled and unskilled roles.

If the result leads to us leaving the EU, Labour’s manifesto talks about seeking to protect those rights of free movement. Though there is no further detail beyond this, we suspect that their policies may be more favourable than the Conservative policies.

Labour also promises to grant those European nationals already in the UK an automatic right to stay without having to register under the EU Settlement scheme. This would give them certainty over their long-term status in the UK.

Liberal Democrats

The Liberal Democrats are unequivocal on Brexit, promising that Article 50 would be revoked immediately and Brexit cancelled. The manifesto also talks about replacing the sponsorship regime with a more “flexible merit-based system”.

The manifesto focuses on upskilling individuals, by providing a £10,000 “skills wallet” for adults to access further education/training. This could help address the skills shortage, frequently bemoaned by UK employers.

What should HR teams be considering?

Whichever party wins, any new immigration system is unlikely to be in place by January 2021. However, there are action points that employers should consider now:

  • Urgently consider your talent pipeline to check if there are any European nationals overseas you need to be based in the UK long-term. They may need to enter the UK before 31 January 2020 (if there’s no deal) or by 31 December 2020 (if the deal goes through)
  • Check that employment contracts state ongoing employment is subject to the individual having the right to work in the UK and able to provide satisfactory evidence
  • Assuming we do leave the EU (whether in January 2020 or later), engage with current European staff to check they are taking required action under the EU Settlement scheme
  • With recent crackdowns on sponsor compliance (including revoking sponsor licences), employers holding a sponsor licence should carry out an audit to check their compliance and ensure that sponsor compliance is taken seriously. Businesses that do not yet hold a sponsor licence may consider whether they need to apply for one
  • Factor in the likely increased costs of sponsorship when setting recruitment budgets and consider how to recruit or upskill the resident labour force.
Kerry Garcia and Jackie Penlington

About Kerry Garcia and Jackie Penlington

Kerry Garcia is a partner and Jackie Penlington is managing associate at Stevens & Bolton LLP.
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