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

Conclusion

Salary Threshold

215. The Scottish Government has significant concerns about the impact of a salary threshold and there is clear evidence that the current level of £30,000, or the 25^th percentile, is too high.

216. The Tier 2 salary threshold will have a disproportionate effect on females. The proportion of jobs held by women with earnings over £30,000 per annum are much lower than for all workers. This suggests that women wishing to migrate to Scotland for employment purposes will be significantly less likely to earn sufficient to qualify under these proposals.

217. This proposed threshold would damage Scotland’s economic, social and demographic prosperity. It would disadvantage rural communities and have a more significant impact on women and young people. We believe there should be a lower salary threshold reflecting the living wage; and that explicit recognition should be given to part time working.

218. If the UK Government is serious about moving to an Australian points style system then a salary threshold is no longer relevant, but past earnings are one of a number of areas where individuals could be awarded points.

Points-Based System

219. The current UK immigration system is described as a points-based system, but since 2012 there has not been a true points-based route in the UK immigration system.

220. Most international (non-EEA) migrants in Scotland (and the UK) are issued with a visa under one of the tiers of the current UK immigration system.

221. It is worth noting that in our 2018 discussion paper, Scotland’s Population and Migration needs, we proposed a “Scottish visa” as an additional option in the UK immigration system, to allow an extra route for people who want to come to live and work permanently in Scotland.

222. This proposed a human-capital, points-based selection approach, with a broader range of criteria than the current UK immigration system allows for.

223. These criteria would attempt to capture the social value or wider contribution a person or family could make to life in Scotland, rather than focussing solely on high earnings or advanced qualifications.

224. The Royal Society of Edinburgh’s advice paper on Migration, Diversity, Rights and Social Protection analysed the effects of withdrawal from the EU and free movement and concluded that “of the various approaches available, a differentiated points-based system would be the most effective in responding the Scotland’s demographic, economic and socio-cultural goals”.

225. Similarly, the independent Expert Advisory Group on Migration and Population’s recently published second report, drawn on policy approaches in other countries, examined 5 case studies where migration has helped offset demographic pressures. These case studies are also notable in that they each contain varying degrees of regional differentiation built into their immigration systems.

• Canada: Provincial Nominee Programs (PNPs)
• Canada: Atlantic Immigration Pilot Program
• Australia: State Specific and Regional Migration (SSRM) Scheme
• Spain: Catalogue of ‘Hard to Fill’ Occupations
• Sweden: 2008 Liberalisation of Labour Migration Policy

226. The five case studies illustrate a range of immigration policies designed to address different types of shortages. The Canadian and Australian systems are explicitly oriented towards addressing aggregate, sectoral and geographic shortages (including through promoting settlement and retention in remote and rural areas) – similar to the challenges faces in Scotland.

227. The report made clear that a points-based system can be applied to increase skilled-based migration and offer specific routes for regions or occupations, but this is not sufficient.

228. Scotland needs other migration routes to replace the significant levels of migration offered through freedom of movement, including family migration, and low-skilled routes.

Summary

229. In summary, the UK Government’s proposed salary threshold and points-based system would not provide the flexibility that Scotland needs to sustain our working age population and would fail to take account of the regional population and skills variations that define our labour market.

230. The David Hume Institute’s recently published report ‘State of the Nation: Who will do the Jobs’ supported this positon:

“Scotland’s immigration needs are distinct from those of England: in particular, we need higher rates of migration. This means that we require a system which can take account of different needs in different parts of the UK, as well as different needs across Scotland.”

231. Scotland’s population is facing significant challenges including de-population in rural areas, skills gaps and labour shortages in both public and private sectors. While our population grew in the last year, 14 of our local authorities experienced depopulation and projections are that all of our population growth over the next 25 years will be driven by migration. Therefore, while activity such as promoting fair work, employability support and reskilling and upskilling is aimed at increasing participation and productivity, Scotland needs to be able to attract talent from outwith Scotland to address our population challenges.

232. These challenges are explored in our paper (2018) and we have committed to publishing a further policy paper providing further developed migration solutions for Scotland.

233. The ability for employers in Scotland to attract the right people with the right skills could be significantly impacted by the UK Government’s proposals. Very few occupations which require below intermediate level skills would provide a salary of £30,000 or above.

234. A research piece by four academic and research bodies, the Royal Society, the British Academy, Royal Academy of Engineering and the Academy of Medical Sciences, similarly concluded that a £30,000 salary threshold would be detrimental for research and immigration. At a UK-level, the median salary for technicians in UK universities is £26,280^[78], with 42% of technicians earning less than £30,000 a year^[79]. While the majority of roles in the research and innovation sector meet the proposed skills threshold of RQF Level 3, for the most part these do not attract salaries of £30,000. Skilled people from overseas would be ineligible for a visa and without an (estimated) increase of up to 50% in the researcher workforce^[80], the UK would be unable to meet its ambitions for the R&D Sector.

235. Additionally, a blanket immigration system would disproportionally affect regions and sectors of Scotland. Ernst and Young’s Brexit Sectoral Impact Assessment^[81] highlights the sectors and regions which will be most deeply affected by an end to free movement:

“In Scotland, EU workers make up a notable share of employment in a number of sectors including agriculture where there are around 10,000 seasonal migrant workers, life sciences where EU workers account for 17% of the workforce and food and drink.”

236. Scotland’s Future Skills Action Plan and the accompanying Evidence and Analysis paper highlight the range of challenges we face now and in the future in ensuring we have a highly skilled and productive workforce supporting our ambitions for inclusive economic growth. These include: demographic changes, and in particular the ageing workforce, meeting skills needs in rural and island communities, technological advancement and digitalisation, EU Exit and the Global Climate Emergency.

237. The evidence paper notes the potential impact of a fall in EU inward migration and highlights existing challenges in the current system for non-EU workers:

“From a supply perspective, a fall in EU migration due to Brexit could exacerbate existing skills gaps in these sectors. Of the businesses in Scotland that reported hard to fill vacancies in the UK Employer Skills Survey, 41% tried to recruit non-UK nationals to fill them. Of those businesses that tried to recruit non-UK nationals, a large majority (89%) tried to recruit EU nationals. This suggests that if recruiting EU nationals becomes significantly harder after Brexit, there will be a major impact on businesses currently using this as an employment strategy to mitigate hard to fill vacancies.”

“Data from the UK Employer Skills Survey shows that the Highlands & Islands and South of Scotland already have issues with difficulties in obtaining work permits for non-EU staff and this is a reason for some hard to fill vacancies in these regions. Depending on the agreed immigration framework for EU nationals, this issue could be exacerbated, particularly in these regions.”

238. While the Plan sets out actions we are taking to address the challenges we face, we are clear that Scotland’s economy and continued prosperity will continue to rely on our ability to attract workers across a broad range of skills levels, many of whom will not reach salary levels set out in the paper.

239. Finally, the David Hume Institute report references the immigration system in Canada as demonstrating how individual provinces can have a say over defining their immigration needs in partnership with the federal government.

“The Canadian PNP and the Canada-Quebec Accord show that systems can be built to accommodate the distinct needs of sub-national units within a federation or union. The Canadian example also demonstrates that asymmetric devolution – such as that in the UK – could be acknowledged via bilateral agreements between central and devolved governments.

Evidence suggests this approach has mitigated depopulation in some provinces, and has had a significant economic benefit. With more than 80% of participants remaining in their province of arrival, the evidence also suggests that as long as economic opportunities exist, many people will settle long term in their new community.”

240. The David Hume Institute reports states that if strong agreements at UK and SG level were put in place alongside robust governance arrangements, there is little to stop us taking a similar approach and developing an immigration system that works for Scotland and other parts of the UK.