UK: Migration Advisory Committee Report - Tier 1: Recommendations

On 30 April 2009, a Conceptual Paper and Call for Evidence was published requesting a response from the Migration Advisory Committee ("MAC") to the following issues:

• What further changes to Tier 1 of the Points Based System should there be in 2010/11, given the changing economic circumstances?
• Is there an economic case for restricting Tier 2 to shortage occupations?
• What is the MAC's assessment of the economic contribution made by the dependants of the Points Based System and their role in the labour market?

A report on the second two queries was published on 19 August 2009 and the recommendations were accepted by the UKBA (Previous Law-Now). These changes are due to be implemented in April 2010 and the changes to the Resident Labour Market Test will be implemented on 14 December 2009 (Previous Law-Now). A further law now will be published next week detailing the timescales for implementation.

The MAC have today published their report on the suggested changes to Tier 1 of the Points Based System and these are outlined below.

Whilst the MAC recognises that this tier allows the 'brightest and best' to come to the UK, their focus is to ensure that UK workers are not displaced or undercut and that immigration does not act as a disincentive to invest in the development of UK employees. Further the MAC specifically states that any changes brought in should not adversely affect those already under Tier 1 and that transitional arrangements should be prescribed before changes are made.

Tier 1 (General)

The MAC recognises the benefit of attracting the most highly skilled individuals to the UK and does not favour the scheme being closed. It makes the following recommendations for changes:

• Some professional qualifications should be recognised as equivalent to a Master's degree (potentially including the Legal Practice Course and medical degrees). It recommends that UKBA consults UK NARIC and stakeholders to add to the list of recognised courses. At present these individuals are unable to apply under Tier 1 (General) as they do not hold a professional qualification which is recognised as equal to a Master's degree which is a bone of contention for many disgruntled US lawyers in particular!
• Bachelor's degrees are to be recognised as academic qualifications as currently an individual must be educated to at least Master's degree level
• Points awarded for age up to 39 (currently an individual will only score points up to age 31)
• Points for earnings are recalculated (please see table below). There should be a new route of entry for high earners with no formal academic qualifications. As such 75 points will be awarded for those earning over £150,000. The minimum earnings threshold should be are raised to £25,000 from £20,000
• UKBA considers whether an employer can guarantee an individual's maintenance. Under Tier 2 an employer can certify a migrant's maintenance.
• Initial applicants granted two years leave (instead of three) and extend by a further three (instead of two), proving that the individual is in highly skilled employment.

Table of recalculated points

Impact for employers

Although Tier 1 is a category for individuals, it is also useful for employers to bring migrant workers to the UK. This review will be extremely positive for employers prevented by the introduction of the requirement to have a Master's degree from bringing in extremely senior, well-paid staff as there is now a recognition that academic achievements are not the be all and end all. However, the rise in the earnings requirement may cause issues for those with lower paid roles who have previously relied on academic achievements to reach the points threshold.

Tier 1 (Post Study Work)

The MAC were particularly mindful of the economic benefit that non EEA students bring to the UK, in particular in relation to the higher tuition fees they pay which is invested in UK universities and wanted to preserve this route as a means of continuing to make the UK an attractive place to study. It made the following recommendations:

• Leave entitlement to be retained at two years with no differentiator for Scotland
• UKBA commissions detailed analysis and reviews whether Tier 1 (PSW) should be restricted to certain institutions or degree courses

Impact for Employers

The commission of analysis and relevant changes may affect employers in the future as there is a risk that the government will seek to restrict Tier 1 (Post Study Worker) category to skill shortage courses (much like under the old Science and Engineering Graduate programme). However, the MAC's recognition of the attractiveness of this scheme to individuals coming to the UK to study is encouraging that any changes will not be unduly restrictive.

Tier 1 (Investor) and Tier 1 (Entrepreneur)

The focus of this note is the impact on employers and further the MAC received little data on these categories. Whilst they recommended that UKBA dedicate resources to examining whether jobs created through the Tier 1 (Entrepreneur) route created a genuine net increase in jobs, they made no recommendations as to substantive changes to these categories.

Conclusion

The recommendations of the MAC in relation to Tier 1 are likely to be welcomed by employers, particularly those who have been unwilling to licence as Tier 2 sponsors. The main complaint that only individuals with Master's degrees were eligible for Tier 1 (General) has been addressed and the introduction of an additional salary threshold for very high earners will be extremely beneficial for those companies looking to move senior staff into the UK.

However, the recommendation that the salary threshold will increase for Tier 1 (General) may cause issues for academics and other sectors who typically have lower earnings.

Should these changes be adopted, there will be a real viable alternative to Tier 1 which in some circumstances will enable the individual to have a personal immigration status and will allow employers to avoid the onerous sponsor compliance obligations on them.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 04/12/2009.