Crystal Ball Gazing

02 June 2017

So what will our immigration system look like after Brexit? The reality is that nobody knows. However, we can make some educated guesses based on current government policy.

So what will our immigration system look like after Brexit? The reality is that nobody knows. However, we can make some educated guesses based on current government policy.

The Government remains committed to reducing net migration to the tens of thousands and maintains this cannot be done until they have control over immigration from Europe. Meanwhile other EU leaders have asserted that access to the free market for goods and services is only possible in conjunction with free movement of people. It remains to be seen what price will be paid for any future trade deal. Theresa May has stated that no deal is better than a bad deal but this may just be an example of the posturing that goes on at the start of any negotiation.

There has already been a slight softening of her approach as she has acknowledged that whatever happens there will need to be a transition period to help business adjust to any new arrangements. This has reduced fears of a “cliff edge” in immigration policy.

There is currently a large amount of consultation and lobbying about what the new rules for EU nationals should look like.

The most obvious change would be a restriction on EU nationals seeking work in the UK. Currently 57% of workers arrive with a job, but the other 43% only find work once they are here. Recent BEIS consultation has focused on whether EU migrants should be required to have firm job offer before coming to the UK. This would change how employers recruit EU nationals, requiring more planning and slowing down recruitment.

The government recognises the need for highly skilled EU workers. The challenge is at the lower end of the skills spectrum. However we believe that business will be able to make the case for a range of workers, for example in the agricultural, food production and construction sectors.

For the government to exert control, we expect that even if jobseekers are allowed to enter the UK, they will need a permit before they start work. This could fit within Tier 3 of the Points Based System, which is currently closed. It might work like Tier 2, where individual employers are required to maintain sponsor licences, or like the government authorised exchange schemes within Tier 5, where there is an overarching sponsor. The government will probably prefer to deal with designated industry bodies rather than numerous employers. If so, to address concerns of abuse and high charges, they may need to specify a permitted fee structure as is the case with Tier 1 Exceptional Talent endorsements. 

Whatever happens, the Government is unlikely to achieve its goal simply by restricting immigration from Europe. 

Firstly, net migration figures include British nationals returning to the UK after spending more than a year abroad. Even if large numbers of disenchanted EU nationals leave the UK, the Government will need to factor in returning British expats. Furthermore, if EU nationals are restricted from coming to the UK, the quid pro quo is that British nationals will be restricted from moving to the EU.

We expect any deal with Europe will be based on reciprocity. However, this is not entirely straightforward. The UK already has reciprocal arrangements with certain countries in respect of the Tier 5 Youth Mobility Scheme. This works as a straight swap of agreed numbers of young people. Europe is more complicated, because a large percentage of British expats are retirees, whereas the EU nationals we welcome are predominantly students and younger workers, so reciprocity would not be on a like for like basis. There are also other elements that require negotiation, including student tuition fees and portability of pensions.

Secondly, there are in fact more non-EU migrants than EU migrants who come to the UK each year. The Government has always had control over the rules for non-EU immigration and has still not achieved a significant reduction in those numbers. Several countries including India and Australia have already indicated that they will seek visa concessions as part of any trade deal. 

In April 2017 an immigration skills charge was implemented, to incentivise Tier 2 sponsors to train and recruit local workers rather than migrants and to generate more funds for apprenticeships. It remains to be seen what impact this will have, particularly on intracompany transfers within the IT sector, which make up the greatest proportion of Tier 2 visas. We expect the Government will take time to observe and consider the effects of these latest changes before deciding what to do next. However following this trend we consider employers making the case for sponsorship in future will need to show greater commitment to training and it would be prudent to start considering now how you can use apprenticeships.

If you would like to discuss how you can future-proof your particular business, please speak to Clare Hedges in our Immigration Team.

The content of this article is for general information only. For further information , please contact a member of Birketts' Employment Law Team. Law covered as at June 2017.