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UK to 'end reliance on cheap labour' with new immigration system

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

The UK government has vowed to “end the reliance on cheap, low-skilled labour” with its new points-based immigration system.

The Home Office on Wednesday launched proposals for a new Australia-style points-based immigration system, which will take effect from 1 January 2021.

The proposals mean foreigners moving to the UK will have to earn enough points to gain a visa. Points will be awarded for things like English language skills, professional qualifications, job offers and salary. A minimum threshold would mean migrants would have to speak English and have a job offer worth £25,600 ($33,278) a year.

Flower pickers from Romania harvest daffodils on Taylors Bulbs farm near Holbeach in eastern England. (Oli Scarff/AFP via Getty Images)

Read more: What UK immigration rules will look like after Brexit

The new system will be applied to people from around the world, including the EU, and the government said an estimated 70% of EU citizens would not pass the proposed points hurdle.

The Home Office said the new system would reduce overall migration levels and curb the number of low-skilled migrants coming to the UK.

“The government has listened to the clear message from the 2016 referendum and the 2019 general election and will end the reliance on cheap, low-skilled labour coming into the country,” the Home Office said in a statement.

“We’re ending free movement, taking back control of our borders and delivering on the people’s priorities by introducing a new UK points-based immigration system, which will bring overall migration numbers down,” said home secretary Priti Patel.

“We will attract the brightest and the best from around the globe, boosting the economy and our communities, and unleash this country’s full potential.”

Home secretary Priti Patel meets students and staff working on 'carbon capture' at Imperial College London in South Kensington, London where she announced plans for a new points-based immigration system. (Stefan Rousseau/PA Wire)

While the system will likely curb low-skilled migration, the government has relaxed its definition of what qualifies as low skilled.

Earlier proposals suggested migrants would have to earn a minimum of £30,000 to come to the UK, but the minimum salary threshold will now be set at £25,600. Migrants will also only have to have A-Level or equivalent qualifications, rather than degree level-qualifications under the current system that applies to non-EU migrants.

Skills shortage fears

Business groups welcomed the relaxed threshold but warned there could still be skills shortages under the new system.

Read more: UK firms fear staff shortages and red tape from Brexit migration plans

“Companies are already investing heavily in home-grown talent across the UK, but critical labour shortages mean firms will still need access to overseas workers at all skill levels,” said Adam Marshall, director general of the British Chamber of Commerce (BCC). 

Mike Cherry, chair of the Federation of Small Businesses (FSB), said: “It’s right that additional points are awarded for those with skills relevant to industries struggling with shortages. 

“However, there are also many jobs in the care and construction sectors that may not meet skill requirements but are essential to our economy and society.”

Read more: Government tsar warns EU migration curbs 'could fuel people smuggling'

Both Marshall and Cherry called for the government to bake in flexibility to the new immigration system by allowing the creation of short-term visas to address skills shortages, as and when they occurred.

The government on Wednesday announced a “seasonal workers pilot” for the 2020 harvest, which will create 2,500 to 10,000 visas to ensure there are enough labourers to pick crops at farms across the UK.

The new immigration proposals are based on recommendations from the Migration Advisory Committee, which reported to the government last month.