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

Scottish Government position on the UK Immigration System

16. The proposals to end free movement and to restrict immigration to Tier 2 and temporary routes as set out in the Immigration White Paper would significantly disrupt patterns of mobility and settlement across Scotland. A proliferation of smaller groups of migrants from a wider range of countries, a predominance of shorter stays, and changes to gender, age and family profiles will have implications for integration.

17. More broadly, shrinking the number of those granted entry to live, work, and study in Scotland will only serve to reduce our working age population and squeeze our much needed population growth. Restricted routes for EU migration will be particularly disruptive for rural and remote areas of Scotland where the age structure means that in-migration is the only means of countering depopulation. The economic conditions in rural and remote areas suggest that a £30,000 salary threshold will make it very difficult to recruit workers through existing migration routes.

18. In February 2019 the independent Expert Advisory Group on Migration and Population published a report on the impact of the UK Government’s White Paper proposals in Scotland. They estimated migration to Scotland over the next two decades would fall by between 30% and 50%, causing the working age population in Scotland to decline by up to 5%; and that even with reduced migration to the UK as a whole, the working age population in the rest of the UK would continue to grow.

19. The Expert Advisory Group on Migration and Population analysed differences in income across Scotland. Their analysis shows that 63% of employees in Scotland (both UK and non-UK nationals) earn less than £30,000 and a threshold at that level would dramatically constrain Scottish employers’ access to skills and the workers they need to thrive. The overall reduction in EU immigration would be especially challenging for those sectors most reliant on lower-paid, non‑UK workers, including occupations such as textiles, social care, leisure and travel, sales and elementary occupations. Many of these sectors would be unable to adjust by increased investment in skills or capital. The seasonal and temporary programmes proposed by the UK Government would prohibit the longer-term settlement of immigrants working in key sectors such as health and social care, education, construction and tourism.

20. The Expert Advisory Group also found a significant gender differential in the distribution of salaries, with a lower proportion of women earning over £30,000 in almost all sectors, implying that such a threshold would create a gender disparity in the supply of future migrants. There was also a striking divergence in the distribution of salary levels across areas of Scotland.

21. Not only, then, will reducing migration to Scotland harm our economy, it will also significantly constrain our ability to deal with our pressing demographic challenges and will undoubtedly disrupt the effective functioning of public services across our communities.

22. Implementing a high salary threshold would restrict the ability of employers to attract the international talent they need in all sectors of the economy, including social care, construction, agriculture and new growth industries in creative, digital and fin-tech. It is positive that the Migration Advisory Committee is undertaking a further review of the proposed salary threshold, including consideration of differentiated regional salary levels for different parts of the UK.

A Points-based Approach to Migration

23. A points-based approach to selecting migrants can be an effective way to broaden the range of criteria for eligibility, allowing migrants to score points across multiple human capital characteristics. The UK Government previously had a points-based visa route, from 2008 to 2012.

24. A points-based system in itself does not imply either an open or a restrictive approach to managing immigration. That is determined by the policy intent of the government, and the criteria they select and the points weighting they attach to those criteria. The experience of territories who currently use points-based immigration systems, such as Canada, New Zealand and Australia, is that they are effective in promoting migration by allowing applicants to score points across a range of characteristics.

25. The UK Government did previously have a points-based visa route from 2008 to 2012. This was closed to new applicants in 2012 in response to what the UK Government perceived as ‘abuse’ of the route. This highlights a broader issue relating to the lack of engagement and consultation before the announcement of significant shifts in immigration policy. Immigration policy should be based on evidence and full engagement with stakeholders to develop proposals and policies which meet the needs of all parts of the UK. Starting with a policy position and then gathering evidence to support that policy position, particularly within a constrained timetable, while limiting the opportunities for debate, risks flawed outcomes.

26. A points-based approach to selecting migrants can be an effective way to broaden the range of criteria for eligibility, allowing migrants to score points across multiple human capital characteristics. It is typically not tied to a migrant having a job offer, although that could be one of the criteria for which points are awarded. Migrants are able therefore to enter the labour market and seek work in the same way as migrant workers.

27. A points-based system should therefore not require a salary threshold, and this approach would address many of the concerns arising from the White Paper proposals. Points could be awarded for earnings or for skills or experience in a particular sector. An approach focusing on skills or experience in key sectors could also help to address gaps in sectors of high social value but where the qualifications and salary levels would not meet the thresholds set by the current Tier 2 Visa route.

28. The UK Government has suggested the adoption of an Australian points-based immigration system. Australia does include regional flexibilities within its points-based system. The Australian Government works with state and territory governments to offer a range of State Specific and Regional Migration initiatives which include varying criteria that recognise the specific needs of rural and regional areas and are designed inter alia to address regional skill shortages, and to ensure that the intake of skilled migrants into Australia is spread across the country. These initiatives are designed to encourage migrants to settle in regions of low population density or economic growth.

29. There is some commonality here with Scotland's situation in relation to the rest of the UK. We need people to settle in Scotland, to make their homes here, to bring their families and to contribute to our long term future prosperity. The demographic pressures in the rest of the UK are less pronounced, and many communities, particularly in England, have larger migrant populations than are typically found in Scotland, or have experienced more rapid growth in migrant populations than typically experienced in Scotland. That has led to different requirements for and perspectives towards migration across the UK.

30. The establishment of the Scottish Parliament reflected an acceptance of the need for a differentiated approach to policy making in Scotland across a range of key issues. It allows for tailored approaches to specific challenges. As the Migration Observatory notes in the 2017 report on regional migration policy, Australia and Canada have full federal structures with democratically elected legislatures and executives to manage such regional differentiation. It is therefore easier to envisage such an approach in areas that already have devolved powers over other policy areas, such as Scotland, Wales and Northern Ireland. The existence of the Scottish Government and the Scottish Parliament ensures that there are existing governance and accountability mechanisms to manage such policy differentiation.

31. The evidence provided by the Scottish Government to previous MAC consultations, the reports from the Expert Advisory Group on Migration and Population and future population projections clearly illustrative Scotland’s distinctive challenges in relation to demography and the age structure of the population, the fragility of rural communities and the role of migration in helping to mitigate these challenges. These differences therefore require a different policy response in Scotland than elsewhere in the UK. Policies and systems that might be appropriate for other parts of the UK are not appropriate for Scotland. Any move to an Australian points-based immigration system must therefore include a commitment to regional differentiation and a tailored approach to migration policy for Scotland.