Consultants face levy for recruiting overseas

Consultants and other employers could be facing paying a fees of £1000 per year for every worker recruited from outside the EU if the government acts on recommendations from its Migration Advisory Committee aimed at encouraging firms to train more home grown talent.

The committee also recommended raising the salary thresholds to prioritise higher value skilled migrants within the Tier 2 visa route from the minimum of £20,800 to £30,000. 

The MAC was commissioned by the Government to advise on a number of potential changes to Tier 2 to address concerns about the rising number of migrants being recruited overseas by UK companies. So-called tier 2 migrants are two categories of skilled workers: those coming to fill jobs advertised under the Resident Labour Market Test (RLMT) and those coming to take up jobs on the Government’s Shortage Occupation List (SOL).

The UK faces a dire shortage of engineers with many engineering roles on the official skills shortlist – that of civil engineers has been on the official shortages list for over nine years.

In its report, Review of Tier 2: Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness, MAC said it strongly supports the introduction of an Immigration Skills Charge (ISC), which it said “will incentivise employers to reduce their reliance on migrant workers and encourage them to invest in training UK employees.” 

It added: “This charge should be in addition to raising salary thresholds. While the level of the ISC is a matter for the Treasury, the MAC suggests that an upfront charge of £1,000 per year for each Tier 2 migrant employed by companies in the UK. This could provide £250m for training and apprenticeships.

Professor Sir David Metcalf CBE, Chair of the MAC, said: “Skilled migrant workers make important contributions to boosting productivity and public finances, but this should be balanced against their potential impact on the welfare of existing UK residents. 

“Raising the cost of employing skilled migrants via higher pay thresholds, and the introduction of an Immigration Skills Charge, should lead to a greater investment in UK employees and reduce the use of migrant labour.” In its report, the MAC recommends • The minimum salary threshold should rise to £30,000 to reflect the current degree level skill requirement for Tier 2. As the typical pay of migrants in some occupations, such as healthcare and teaching, is below the new proposed threshold the MAC recommends this new minimum is phased in. 

The Civil Engineering Contractors Association has criticised the plan and warned that it would penalise those companies that are delivering the UK’s public infrastructure.