Proposed changes to Tier 2 of the Points-Based System

Following the recent Migration Advisory Committee (MAC) report on the workings of Tier 2, and the subsequent UK Border Agency press release on the 19^th August, it seems that the Government is set to make significant changes to the rules and regulations governing Tier 2 of the Points-Based System (PBS).

Firstly, the MAC report recommends that, in the current, difficult economic climate, it would be beneficial to the UK labour force to have improved access to the skilled jobs for which Tier 2 certificates of sponsorship are issued. As a consequence, all skilled vacancies will have to be advertised for a minimum of 28 days in Jobcentre Plus,  instead of the present 14 day period. This will allow the resident labour force more time to find such vacancies and apply. There are and will continue to be a small number of job types that will be exempted from this increased advertising period.

There will also be changes to the points-based criteria for Tier 2, increasing the number of points awarded for a Masters (from 10 to 15), and a new category will be established for what is termed “key public sector workers”, which will attract an additional 5 points simply for being a vacancy advertised in this sector. Overall the minimum 70 point requirement to qualify for Tier 2 will remain intact.

However there are to be significant changes in the earnings points criteria, with a stipulation that the minimum prospective earnings for a skilled job must be £20,000 instead of £17,000 in order for the job/applicant to qualify under Tier 2. This will have a problematic effect on a number of industries wherein starting salaries for graduates and/or equivalents have often been lower than  this amount.

The MAC report also highlighted the need for the current skill levels present in the UK labour force to be maintained, as it is feared that the UK is in danger of falling behind its competitors, in terms of the availability of skills in the UK economy. Accordingly, it will become harder for UK employers to recruit foreign workers that do not have qualifications relevant to a given skilled job, as it is proposed that the minimum prospective salary for a skilled job that is offered to an unqualified foreign worker must be £32,000 or higher. This will of course be unattractive to employers, who are unlikely to be able to offer such a high salary to an unqualified worker (previously there was no such stipulation, and often a skilled job could still be offered to a foreign worker if the latter had 3 years or more experience in the given type of work, despite lack of qualifications).

Finally, there will be changes to how Tier 2 intra-company transferees are treated. Several different groups of opinion have often expressed reservations in the past about the way in which such individuals are allowed to enter the UK labour force without the need for their positions to be advertised in the UK (these individuals are transferred into the UK entities of overseas corporations, on the basis of their existing knowhow in relation to that corporation’s operations, which, it is felt, is a capability that UK workers would not be able to possess).

Presently such individuals are allowed to transfer to the UK after six months’ work for the overseas entity, but it is now proposed that this period should be lengthened to twelve months. It is also proposed that such individuals will no longer be able to qualify for permanent residency in the UK on this basis alone. If such individuals do want to acquire permanent residency, then they will in future be obliged to switch into another category of the PBS that does lead to permanent residency.

Overall these changes may pose a threat to foreign investment into the UK economy, it could be argued. If overseas corporations wishing to establish UK operations are facing higher hurdles in relation to the recruitment and retention of skilled workforces, they may revise their plans accordingly and look elsewhere for commercial  opportunities.

These changes are yet to be confirmed though, and may well be diluted in nature between now and the next election (in 2010), so we may yet see revisions to the above measures before they are finally brought into effect.