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Minimum annual pay best way to determine right to settlement for highly skilled workers

Minimum annual pay is the best way to select which highly skilled migrant workers should be eligible for settlement, the Migration Advisory Committee (MAC) has recommended.

In a separate report the MAC has also advised that relaxing the current employment restrictions on workers from Bulgaria and Romania would cause further disruption to the UK labour market.

The MAC was commissioned by the government in June to identify the most suitable economic criteria for determining which Tier 2 migrant workers could settle permanently in the UK and what the economic effects of restricting or removing settlement rights would be.

The MAC has made the following recommendations:

  • a simple pay threshold be used to decide eligibility for automatic settlement among Tier 2 (general) migrants;
  • migrants entering through the Tier 1 (exceptional talent) route to proceed to settlement after 5 years subject to continuing to meet the criteria for that route;
  • a pay threshold between £31,000 and £49,000 for Tier 2 (general), set at the time of entry and adjusted for inflation or changes to average pay, would be economically defensible;
  • sportspeople should also be subject to the same pay criteria as other migrants under Tier 2 (general); and
  • government and businesses should work together to upskill the UK labour market to mitigate the impact of restricting settlement rights.

Professor David Metcalf CBE, Chairman of the MAC said:

'After extensive consultation the MAC has recommended a pay threshold as the best way to decide if a worker can stay in the UK. This is based on sound economic theory.

'Imposing greater controls on settlement may mean that the annual limit on entry into Tier 1 and Tier 2 would not need to be reduced as much as it would otherwise to meet the government's objective of reduced net migration.'

A number of changes have already been made to the Tier 2 migrant workers route by the government which are likely to see the number of settlement applications fall. Therefore, a 'do nothing' option is defensible but, equally, the MAC believes the government's intention to control settlement numbers is legitimate.

The effects of any change will not be fully felt until 2016. This will allow time for employers and government to work together to upskill the UK workforce in those occupations most affected.

The MAC was also asked to look at the consequences of maintaining or lifting the current employment restrictions on workers from Bulgaria and Romania.

The government has the option of lifting the transitional controls at the end of 2011 or keeping them in place for a further 2 years when they must be lifted under EU law.

After analysing the UK labour market the MAC has concluded that lifting of the restrictions could see more Bulgarian and Romanians come to the UK for work. There is a risk that this would have an adverse impact on the UK labour market and UK employment.

Professor Metcalf said:

'While there is uncertainty about how many additional A2 workers would come to the UK if restrictions were lifted, it is clear there would be an increase. The UK labour market is currently seriously disturbed and there is a risk that lifting the restrictions would exacerbate this.'

You can download these reports from the Migration Advisory Council page.