The Migration Advisory Committee (MAC) has recommended that the government either scraps or heavily reforms the shortage occupation list.
The SOL is the government’s list of occupations it deems to be in short supply, whereby employers can sponsor someone on a skilled worker visa on a lower salary than would normally be required.
The MAC was commissioned to conduct a review of the SOL and concluded that making it easier to recruit lower-wage workers could increase the risk of exploitation.
It also found that the high administrative burdens of the scheme – such as having to apply for and purchase a sponsor licence – made it uneconomic for businesses to use it to hire low-wage migrants, meaning it could result in a longer-term cost to the UK economy.
“These concerns mean that we are not convinced that the SOL provides a sensible immigration solution to shortage issues in low-wage sectors, and so our preference is for the government to abolish it,” the committee said.
Shortage occupation list
Braverman: Train up UK workers for shortage occupations
Construction: immigration rule relaxation will have little effect
The usual threshold to obtain a skilled worker visa is £26,200, but employers looking to recruit people on the SOL can hire at around 80% of this.
“Many of the occupations we have reviewed have a going rate of around £20,000 to £22,000,” said the MAC. “If they were not on the SOL they would not realistically be able to recruit internationally because they would need to pay the general threshold of £26,200.”
“The going rate helps to protect resident workers from undercutting and reduces the exploitation of migrants… low-wage employment is where the most serious exploitation of workers occurs.”
Instead, the MAC recommends that it examines individual occupations or sectors where skills shortages are particularly acute, working in collaboration with industry bodies.
“Such recommendations could include preferential access to the [skilled worker] route as the SOL currently allows, or suggestions for alternative immigration routes.
“Importantly it would also focus on changes to wages, terms and conditions, training and education and investment in technology that are likely to be a more sustainable response to the problems,” it added.
As jobs on the SOL are the only ones that asylum seekers waiting over 12 months for a decision can request the right to work for, the MAC also recommended that they should be able to work in any job, or in skilled worker roles if the SOL is retired.
For the time being, the MAC has recommended that eight occupations be added to the list, with a further two added to the Scotland-only SOL. These occupations include laboratory technicians, pharmaceutical technicians, roofers, boat builders and a number of care sector roles.
Ben Maitland, senior associate at Vanessa Ganguin Immigration Law, said the report was damning of the existing arrangements.
“The scathing report criticises the current system saying it undercuts local workers, drives down wages and leaves migrants dependent on the employers sponsoring them open to exploitation,” he said.
Speaking at the Conservative party conference this week, immigration minister Robert Jenrick said “quite naive” decisions have been made since the end of free movement from the EU.
He argued that net migration has soared since Brexit because of an “even more liberal” immigration system than when the UK was in the EU. Net migration hit a record high of 606,000 in 2022.
Maitland added: “Many will now be very concerned by this week’s headlines about the MAC’s conclusions and what the government’s response will now be. Especially with the noises coming from the Conservative party conference in Manchester.
“None of this seems like it should be policy for a government whose main stated priority is to reduce inflation and therefore inflationary costs for businesses. Yet like his boss, home secretary Suella Braverman, Jenrick appears keen to appease the more extreme fringes of the Conservative party keen to cap immigration.
“The SOL’s blunt tool which just reduces salaries is never going to be a sustainable solution to stopping skills shortages for the MAC, who argue that lower pay attracts fewer local workers. Hopefully the MAC and the government will remove other impediments to hiring shortage occupations from abroad – such as reducing the costs of visas and stopping the skills charge – which is in effect a tax on employers trying to fill a skills gap.””
Visa price increase
The MAC’s recommendations have been published just as a visa price hike comes into force today (4 October), with many rising by 15% to 20%.
The current fees for a typical five-year visa application by a small organisation will increase to between £6,600 and £9,800 respectively, according to Keystone Law. The government also intends to increase the Immigration Health Surcharge, but a date has yet to be confirmed.
Tsige Berhanu, immigration partner at Keystone Law, said: “Although the skilled worker visa provided some relief to the acute shortage of skilled workers in the aftermath of the pandemic and Brexit, the significant costs associated with these applications have had substantial financial impact on most businesses.
“The hospitality sector is one of those highly impacted by the post-Brexit changes to the labour force, needing to swiftly adapt its recruitment strategies to fill essential positions through the skilled worker route.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Talent management opportunities on Personnel Today
Browse more talent management jobs
