Salary thresholds and an 'Australian-style' points-based immigration system: our response

Introduction

Our Position

1. Scotland is a progressive, outward-looking nation. We recognise that migration strengthens our society and our nation benefits from the skills, the experience and the expertise of those individuals who have chosen to live, work and study in Scotland. Inward migration, including from across the European Union (EU), has made an overwhelmingly positive contribution to Scotland’s economy and society. Migrants play a vital part in ensuring that we remain a diverse and outward-looking country that is open to the world. We welcome those who come to Scotland and make a positive contribution to our communities, our economy and our public services.

2. The UK Government has publicly committed to ending freedom of movement. Yet inward migration has helped to turn Scotland from a nation of emigration with a declining population into a culturally diverse, outward looking nation with a growing population. It has also brought benefits and opportunities for people born in Scotland. The Scottish Government is clear that maintaining free movement of persons is in the best interests of the UK as a whole and of Scotland.

3. The Scottish Government has provided detailed evidence to the Migration Advisory Committee (MAC) in response to previous consultations setting out clear evidence of Scotland’s distinct needs and the important role of migration in supporting our communities, economy and public services.

4. In October 2017^[1] we published detailed evidence showing that EU migration:

• is essential for ensuring sustainable population growth in Scotland which is the largest single biggest driver of our economic growth;
• supports Scotland’s economy, ensuring the availability of a pool of labour, both now and in the future, to meet the needs of employers and businesses right across the Scottish economy and across all sectors, including those as diverse as agriculture and fisheries, tourism and culture, healthcare and education; and
• supports rural communities and jobs brining essential labour to rural industries and supporting public services including healthcare and schools.

5. The evidence that we set out in that report remains relevant and sets out the reliance of key sectors of our economy on EU citizens.

6. It is clear that current UK policy on migration does not meet Scotland’s needs. In February 2018 the Scottish Government published a discussion paper Scotland’s Population Needs and Migration Policy^[2] setting out options for a future migration system tailored to Scotland’s needs. This paper recommended that the UK Government should:

• Abolish the net migration target, or at least migration to Scotland should not be counted in it;
• Take a different approach to family migration, and improve the rights of people in Scotland to bring close family into the country with them;
• Review the immigration skills charge, which is an unhelpful burden on employers;
• Give Scottish Ministers a formal role in deciding on the Scotland Shortage Occupation List; and
• Reintroduce the post study work visa as recommended by the Smith Commission.

7. Since the publication of that discussion paper the UK Government published its Immigration White Paper on 19 December 2018. The White Paper does not address any of the Scottish Government’s recommendations for changes and indeed proposes a future migration system which does not reflect the needs of key sectors of the Scottish economy. Figures detailed in the White Paper itself estimate that if all of the recommendations in the White Paper were implemented (notably the retention of the £30,000 salary threshold for Tier 2) then this could result in an 85% reduction in inflows of long-term workers from EU and European Economic Area (EEA) countries to Scotland.

8. In February 2019 the Expert Advisory Group on Migration and Population published their analysis of the impact on Scotland of the UK Government’s proposals on immigration, proposals which were based on prior recommendations from the MAC. The Expert Advisory Group concluded that reduced migration from the EU would lead to a gradually declining and rapidly ageing working age population in Scotland. At current immigration rates the working age population in Scotland is expected to remain stable over the next 25 years, whereas with reduced migration from the EU it is projected to decline by between 3% and 5%. This is in contrast to the UK as a whole, where the working age population would still grow with reduced international migration.

9. The Scottish Government’s response to the MAC’s Call for Evidence on the Shortage Occupation List (SOL) provided detailed evidence in relation to a number of sectors of the Scottish economy while also providing detail on how the SOL could operate in future and how a differentiated approach for Scotland could work.

10. The Scottish Government has engaged proactively with each of the MAC’s calls for evidence and provided detailed evidence of Scotland’s distinct challenges. Challenges which are a consequence of Scotland’s historical legacy as a nation of emigration. Scotland is now a nation of net immigration but that legacy means that many of our communities still need to replace those lost generations.

11. Migration is crucial to growing Scotland’s population and specifically the working age population. It is crucial to our economy and to economic growth. Changes to migration policy have a greater impact in Scotland than in the UK as a whole, as evidenced in the figures published in the UK Government White Paper, given the greater significance of migration to Scotland’s population growth. The economic modelling that we set out in our 2017 evidence to the MAC and in our February discussion paper showed that real GDP in Scotland will be 4.5% lower by 2040 as a result of lower migration whereas the comparative figure for the UK is 3.7% lower.

About this paper

12. This paper sets out the Scottish Government’s response to the call for evidence launched by the UK Migration Advisory Committee (MAC) on Salary Thresholds and a Points-Based System.

13. In compiling this evidence we have been mindful that this consultation is taking place in an evolving context. The MAC published their report on EEA migration in September 2018 and the UK Government published their Immigration White Paper in December 2018 setting out their proposals for a future immigration system. However, there is now considerable uncertainty about the status of the Immigration White Paper given the current Government’s policy statements advocating an Australian-style points-based immigration system.

14. The suggestion that the UK should move to an Australian-style points-based immigration system suggests a significant change to the UK immigration system to that proposed in the Immigration White paper. It is important to ensure that we have an immigration system in place which enables our economy and our public services to recruit individuals with the skills that they need; which allows our communities to prosper and is fair and transparent to individuals and employers seeking to navigate the system. Given the importance of this issue we would encourage the UK Government and the MAC to extend the consultation period and undertake a full programme of engagement and consultation focusing on developing an immigration system which meets the needs of all parts of the UK, including Scotland.

15. Despite these constraints and caveats, this paper provides evidence as set out below:

• Section one outlines the general Scottish Government position in relation to the UK Immigration proposals.
• Section two outlines general evidence on salaries in Scotland.
• Section three provides sector-specific evidence across the Scottish economy, highlighting key sectors including tourism and hospitality, culture and creative industries, manufacturing and construction, and health and social care.