The MAC (Migration Advisory Committee) has published its interim report looking only at the salary threshold idea last week. The report comes after Prime Minister David Cameron asked the Migration Advisory Committee (MAC) to look at options to reduce the number of people entering the country through the Tier 2 visa system.
The MAC was asked to consider the impact of increasing the Tier 2 (General) minimum salary threshold of £20,800 and the Tier 2 (ICT) minimum salary thresholds of £24,800 (Read more about how how the Immigration Changes could affect Asians). Over 35.000 of 60,000 ICT visa employees in December 2014 were from India.
Non-EU Tier 2 Migrants, including those from India, Pakistan, Sri Lanka and Bangladesh will have to earn £35,000 and above from next year April 2016.
While it’s early analysis found that increasing the minimum salary would ‘likely contribute to the Government’s aim of reducing skilled immigration in the UK’, MAC’s initial analysis has found little evidence to suggest there is widespread undercutting of UK resident workers by Tier 2 migrants occurring under the current salary thresholds.
In addition, the MAC report warned the Government against going ahead with changes to the minimum salary thresholds without considering the wider implications and a wider study into them in December.
They argued that ‘the salary thresholds should not be considered in isolation as they interact with the other proposals within the commission, not least the proposed skills levy.’
Currently, for somebody to apply for a Tier 2 visa, they must earn at least £20,800 per year and meet the minimum skill level of NQF6.
Increasing the salary threshold immediately would be ‘strongly opposed by many employers and would cause serious problems in particular sectors, including theeducation and health sectors‘
The report looked at various options for a new minimum salary threshold: updating it to the tenth percentile would see it rise to £23,000 and would affect 7% of all Tier 2 applications; increasing it to the median earnings for the minimum skill level would see it rise to £39,000 and affect 44% of all Tier 2 applications.
The MAC identified other drawbacks to the plan, including potential ‘bottlenecks constraining the growth of individual firms’ if they are unable to afford higher salaries for skilled non-EU migrants and unable to find appropriate replacements within the UK or EU.