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Immigration salary threshold should be lower says MAC

28 January 2020

The Migration Advisory Committee (MAC) has advised the government to drop the salary threshold for immigrants to £25,600.

Skilled migrants from outside the EU currently need to have a job offer with a minimum salary of £30,000. The Migration Advisory Committee (MAC) has said the threshold should be lowered to £25,600 in order to help businesses, the NHS and schools to recruit more skilled workers.

The review of salary thresholds was requested by Sajid Javid in 2019. Business groups have been calling for a reduction in the salary threshold and the MAC report has acknowledged this, saying that "many stakeholders would prefer there to be no salary thresholds beyond the minimum wage".

This week a number of business groups and trade associations - including the CIPD, the British Chambers of Commerce (BCC), the CBI, the Institute of Directors (IoD) and the Federation of Small Businesses (FSB) - wrote to home secretary Priti Patel offering their help in designing a new immigration system.

New research by the Federation of Small Businesses has highlighted the problems with the £30,000 salary threshold. Its findings reveal that the vast majority (80%) of small employers that hire staff who fall into the "mid-skilled" classification do so into roles with salaries less than £30,000. In the South West and Yorkshire and North East regions, the figure stands at 85% and 90% respectively.

Over one third (35%) of UK small employers that hire staff who are classed as "high-skilled" do so into roles with salaries below £30,000. Most (81%) of the small firms employing mid or high-skilled staff in roles with salaries below £30,000 say they could not raise salaries in order to recruit workers from overseas.

Responding to the MAC review of salary thresholds, Mike Cherry, FSB national chairman, said: "The recommendation to lower the proposed minimum salary threshold to £25,600 is a welcome, pro-business proposal, which would widen the scope for employing those beyond highly-paid professions. It is vital that the workers and skills needed for the UK's economy to grow are not locked out by a future immigration system which is unresponsive to business needs."

Jane Gratton, head of people policy at the British Chambers of Commerce, said: "While a reduction in the salary threshold is welcome and the list of eligible jobs has been expanded, it is disappointing that recommendations did not take account of regional salary differences. This risks limiting access to skills for companies in regions and nations across the UK."

Edwin Morgan, IoD director of policy, said: "The MAC's proposals have taken account of the views of business and as a result there are some sensible recommendations, including introducing points-based visas alongside the employee-sponsored route. We're pleased they are proposing a lower salary threshold for Tier 2 visas, although this may still pose a challenge in some areas."

The overriding concern for business is bureaucracy, he said. "The government must ensure that whatever plans it takes forward, firms aren't faced with a byzantine system when they need talent to grow."

Written by Rachel Miller.

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