This article is taken from the Winter 2023/24 issue of

Think Global People magazine

Click on the cover to access the digital edition.View your copy of the Winter 2023 issue of Think Global People magazine.

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It was the government’s Migration Advisory Committee (MAC) that proposed the abolition of the SOL in its annual review in October. The MAC
said it was unconvinced the list provided a sensible immigration solution to UK labour shortages, and that it opened the door to exploitation by companies because they could pay lower salaries than those required for other visas for skilled workers.Professor Brian Bell, who chairs the MAC, said: “We are not convinced that the SOL is an effective tool to address labour shortages across different occupations and sectors. If ministers accepted this key recommendation, it would mean most of the roles currently on the list are
no longer eligible as they would receive only a ‘negligible benefit’ by being included.”Instead, the committee urged the government to overhaul the current system and devise a new, allembracing scheme to address individual occupations or sectors where labour market shortages were particularly acute. The MAC said new measures, including wages, terms and conditions, training and education and investment in technology were “likely to be a more sustainable response” to shortages.However, Karendeep Kaur, legal director at Migrate UK, said that the MAC’s proposals for a new system would not address the UK’s immediate labour issues. She told ‘People Management’ magazine: “In the interim, businesses are struggling to recruit talent, with hospitality and agriculture continuing to be the hardest hit. It is unlikely that these sectors would benefit with the proposed idea to just invest in training and education.”Skills listed on the SOL currently enable companies to fill job vacancies with overseas staff on lower visa fees and pay them 80% of their role’s usual rate, down to a minimum of £20,960. Of the 92 occupations on the SOL reviewed by the committee, the MAC has recommended
that only eight remain on the UK-wide list before a new scheme is introduced. Those occupations include care workers, lab technicians, bricklayers, roofers and animal care workers. Additionally, in Scotland only, the committee suggested fishing and forestry managers and boat and shipbuilders be included.

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BUSINESSES REACT TO THE MAC’S RECOMMENDATIONS

The MAC’s proposals have not gone down well with business leaders who have long called for a more liberalised approach to immigration to boost economic growth. Within a fortnight of publication of the MAC’s proposals, the ‘Employment Trends Survey’, published by the Confederation of British Industry (CBI) and the Pertemps Network Group, showed almost two-thirds of UK companies wanted the SOL expanded, not abolished.The CBI/Pertemps survey found that labour shortages were having a material impact on firms’ ability to invest, respond to demand and grow. While about seven in ten businesses said they were trying to narrowthe gap by investing in training to upskill workers and six in ten were investing in technology and automation to improve productivity, 59% supported making all skill levels permanently eligible for inclusion on the SOL.Jamie Cater, senior policy manager at the manufacturers’ organisation Make UK, said the MAC recommendations would “concern many manufacturers” who were experiencing increasing shortages of critical skills. “While manufacturers do not believe that recruiting skilled workers from overseas is the
long-term solution to these shortages, it is an important way to address urgent demand for skilled workers and the current system is hindering their ability to recruit.“The inclusion of occupations on the SOL can be an effective way to ease some of those challenges. It is vital that the MAC is able to review the SOL more regularly going forward, and that this is used to inform the development of a wider skills policy.”Although the number of vacancies in the UK workforce has dropped from last year’s record of more than 1.4 million, the figure is still close to a million. Jane Gratton, deputy director of public policy at the British Chambers of Commerce, says the scale of the recruitment crisis remains “huge”.
She added: “Employers are offering more flexible working wherever possible but are still struggling to hire and retain the right staff to help get them
through these challenging economic times. The picture in the hospitality and manufacturing sectors is particularly worrying. We have just under a million job vacancies in the economy, and skills shortages are damaging businesses’ ability to operate profitably – as well as impacting the wellbeing and morale of remaining staff.“Businesses and the government need to work together to resolve this problem. Bringing more people back into the workforce, with rapid retraining programmes and comprehensive support, will help. While many employers remain sharply focused on investment in training, most businesses need more help to get the workforce skills they need. Positive interventions in the tax and skills system would be welcome to boost investment in workplace training and development.“And where businesses have tried everything possible to recruit people locally, a flexible and affordable immigration system must be there to support them. The Shortage Occupation List does not reflect the reality businesses experience on the ground. The Migration Advisory Committee underlined concerns that the list is not an effective tool to address labour shortages. An alternative must be developed urgently and in consultation with business. Our economic forecasts suggest the coming couple of years are going to be tough for everyone. Solving the recruitment crisis will be key to getting the economy growing.”

WHERE NEXT FOR UK IMMIGRATION POLICY?

In a review of the MAC proposals, law firm Lewis Silkin suggested that if the government implemented the reduced scope of the SOL without abolishing the list entirely, sponsors would generally be expected to pay higher salaries and application fees to sponsor workers
under eligible occupations.“If the list is abolished altogether, the current discount on the general salary threshold for shortage occupations will be removed, meaning that unless a discounted salary option otherwise applies, sponsors will need to pay at least the going rate for the occupation, £10.75 per hour
or £26,200, whichever is highest,” the firm added.There is uncertainty, however, over how the current government will react to the MAC proposals, with some fearing ministers might use it as an excuse for a further crackdown on immigration. In a speech at the Conservative Party Conference this autumn, the-then Home Secretary Suella Braverman, who was sacked in November, said politicians had been “too squeamish” to act on immigration, which she described as “already too
high”. She added that moving to a wealthier country had become a “realistic prospect” for “billions of people” and that a “hurricane” of migration was coming to the UK.Speaking at the same conference, the-then Immigration Minister Robert Jenrick, who resigned in December over controversial plans to deport illegal immigrants to Rwanda, maintained that record-high net migration to the UK, which reached 745,000 in 2022, had soared because the nation had adopted an “even more liberal” immigration system since leaving the EU.Ben Maitland, senior associate at Vanessa Ganguin Immigration Law, commented: “Many will now be very concerned by 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. 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, 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.”Much of industry is now nervously awaiting the government’s response to the MAC, hoping the outcome will be the formulation of a comprehensive plan to tackle the continuing problems of labour shortages in the UK, rather than another political attempt to appease the right wing of the party with a far-reaching crackdown on immigration.

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