Migration Advisory Committee to advise on salary thresholds for new immigration system

The Home Secretary, Sajid Javid, has commissioned the Migration Advisory Committee (MAC) to review and advise on minimum salary thresholds for the future immigration system. The new system is due to take effect on 1 January 2021 and will also apply to EU/EFTA nationals seeking to live and work in the UK post-Brexit. Importantly for regional businesses, the Home Secretary has specifically asked the MAC to consider whether there is a need for regional variation in minimum salary levels. 

What is the Migration Advisory Committee looking at?

The Home Secretary has asked the MAC to advise on a number of issues concerning future salary thresholds and the range at which they could be set, including:

• The mechanism for calculating salary thresholds and how responsive that mechanism should be to changing market conditions
• What impact salary thresholds would have on:
  • annual net migration
  • the resident workforce, including their wage levels and training productivity
  • employers’ supply of labour, including impacts by sector and occupation 
• Exemptions to the minimum salary thresholds, for example for sectors that provide ‘high public value’ to society and to the economy, but might not pay high enough wages to meet any minimum set 
• Whether recommended salary thresholds should apply to the whole of the UK or if there is a need for regional variation 

Are there needs for regional variations?

The MAC previously recommended that the Government should retain existing salary thresholds from the current Tier 2 ‘skilled worker route’ in the new system.  It also recommended these should apply regardless of the region where a business is based or the type of industry sector in which it operates. The thresholds currently stand at £30,000 per annum for experienced workers and £20,800 for new entrants, including recent graduates. 

The Government partially accepted these minimum salary recommendations in its White Paper on the future immigration system, published on 18 December 2018.  However, it stated it intended to ‘engage extensively with businesses and employers, consider wider evidence of the impact on the economy, and take into account current pay levels in the UK economy’, before confirming the level of future salary thresholds. In parallel with commissioning the MAC’s report, the Government is engaging with businesses, employers and other stakeholders before determining precisely where the thresholds should be set.   

The MAC’s report is due in January 2020 and is expected to play a large part in informing the level of minimum salary thresholds under the new immigration system.

For more information on the MAC’s commission and how you can be involved in influencing its conclusions, please contact Kate Gamester or any member of the Doyle Clayton business immigration team.  Please also make contact for further updates on the future immigration system and the impact of Brexit on employing EU/EFTA workers.