Brexit employment update: MAC interim report on revised immigration regime

Analysis so far of the challenges and opportunities posed by Brexit and the expected decline in the flow of migrant labour from the EEA to the UK.

In July 2017, the Government commissioned the Migration Advisory Committee (MAC) to report on the current and likely future patterns of migration from the EEA to the UK and to consider the likely economic and social impact of the UK’s exit from the European Union.

The MAC put out a call for evidence on these issues and, after consulting our clients, we submitted a response outlining key areas of concern.

The MAC has now published an interim report summarising the record 417 responses received to the call for evidence, and its analysis so far of the challenges and opportunities posed by Brexit and the expected decline in the flow of migrant labour from the EEA to the UK.

The detail

The interim report is organised around two broad themes. Firstly, it summarises evidence received about why UK employers engage migrants from the EEA, and what employers fear might happen if a more restrictive migration policy is introduced. Secondly, the report considers whether a reduction in EEA migration would have a disparate impact on any particular area or region of the UK.

The report acknowledges that the vast majority of employers do not deliberately seek to fill vacancies with migrant workers, but do so because they are the best, and sometimes only, available candidates. This seems particularly true in sectors viewed as unattractive by resident workers, such as hospitality or manufacturing. This closely reflects the views shared with us by clients in our own consultation exercise. The report suggests that low pay is part of the “image problem” for these sectors, bur fails to engage with the issue raised by a number of our clients that many businesses are struggling to increase pay levels due to other cost impacts. The report also observes that current low levels of unemployment in the UK may also be responsible for the current recruitment problems many employers are experiencing.

Broadly, employers who responded to the MAC were very concerned about the prospect of restrictions on the ability to recruit EEA migrants. In the MAC’s view this is “unsurprising” given that any restrictions “are likely to make a hard job even harder”. In common with respondents to our own consultation exercise, employers who currently use the Tier-2 immigration system to recruit non-EEA migrants complained that the system was time consuming, costly and overly complex and had serious reservations about the same system being extended to EEA migrants. The MAC observes that fears about the future migration system are particularly great in low-skilled sectors where many workers would not be eligible under the existing Tier 2 system. Again, this reflects prevalent concerns amongst our clients, many of whom strongly supported the extension of the current ‘shortage occupation list’ (an official list of roles for which there are not enough resident workers to fill vacancies) to a variety of lower skilled jobs.

The report notes that many employers feel that the skills they require are scarce amongst the UK workforce, and are very concerned about a skills shortfall, at least in the short term. The MAC speculates that skills shortages might be alleviated more quickly with shorter training times, but observes that this might require action from the Government as well as from employers. Though the report does not go into detail, this may suggest that changes to vocational training are planned alongside changes to the immigration regime.

In terms of regional disparities, our own client consultation exercise suggested that reduced EEA migration might have a significant impact in London and the South-East (though by no means confined to that region) due to the heavy reliance on migrant workers.  However, the MAC focuses more on a potential decline in working age population in Scotland, Wales and Northern Ireland.

What does this mean for me?

While this report is certainly an interesting read, it unfortunately provides very little practical guidance for employers grappling with resourcing issues against the backdrop of Brexit.

The MAC has been careful not to let slip its views on what a revised immigration regime should look like post-Brexit and warns readers not to pre-judge what their final conclusions might be.

The final report of the MAC is due in September 2018, and any changes to the current immigration regime are expected to be implemented in 2021. The MAC acknowledges that many employers feel that “a greater sense of urgency is needed” and “that action is needed now”. However, the report stresses that, while many sectors are already experiencing difficulties in recruiting and retaining EEA migrants, “coming to the right, rather than a rushed, conclusion is what matters”.  It appears that the “sense of pervasive uncertainty” identified by the MAC amongst respondents to its call for evidence is likely to persist for some time yet.

In the meantime, if you are struggling to get to grips with the potential impact of Brexit on your organisation, or are concerned about how best to support your current employees, we would be happy to advise you.

The full interim report published by the MAC is available online at Gov.uk.

Our response to the MAC call for evidence  on the economic and social impacts of the UK’s exit from the European Union is available on our website.

Elaine McIlroy (elaine.mcilroy@weightmans.com) is a Partner in the Employment, Pensions and Immigration Team at Weightmans LLP and is based in Glasgow. Elaine has extensive experience of advising employers in all sectors on all aspects of immigration law and on workforce planning to meet the challenges of Brexit. If you have any questions, please do not hesitate to contact Elaine or speak to your usual Weightmans advisor.

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