Shortage occupation list 2018: call for evidence - our response

4. MAC Report And UK Government Approach

242. Scottish Government provided detailed evidence to the MAC on the positive impact of EEA nationals. The evidence collated by the MAC and detailed in the report was very clear about the positive impact of migration and went a long way towards dispelling some of the commonly held misconceptions about EEA migrants. This reflected our clear view that migration had brought benefit to Scotland.

243. However, we were disappointed in the conclusions that were drawn from this evidence and particularly by the lack of engagement with the demographic evidence we provided. It is also regrettable that both the MAC and subsequently the UK Government are suggesting significant changes to migration without undertaking any modelling of the impact on business or public services.

244. The Scottish Government is clear that the proposals set out in the UK Government’s White Paper do not reflect the needs of Scotland’s economy or communities. Modelling in the White Paper suggests that if the recommendations were introduced it would affect 85% of long term EEA inflows into Scotland. 

245. Including EEA citizens within the current UK Government Points Based System (PBS) will have a significant detrimental impact on the labour supply. In addition to reducing overall access to labour this approach will disproportionately impact on Small to Medium sized Enterprises (SMEs). The Federation of Small Businesses has highlighted that 95% of SMEs have never made use of the PBS, as the majority have recruited EU workers from Scottish and UK labour markets (85%)^[133]. SMEs in particular are prevented from accessing the labour they need through the UK immigration system due to the costly and complicated nature of the system. Ending freedom of movement removes a source of labour for these businesses and puts one more barrier to their success.  

246. The White Paper proposes no route for what the MAC and the UK Government term ‘low skilled labour’ – a term which does not reflect the value many of these roles bring to the economy and public sector. The proposal to create a temporary short term workers route does not address the serious issues presented by the removal of a low skilled route. It is a short term solution that only postpones the inevitable damage to business. This proposal for a 1 year temporary visa also ignores the incredible contribution EU citizens have made to our communities, it reduces these people to a number and sends a message that they are not welcome. It creates a two tier immigration system encouraging exactly the type of short term migration that the public in the National Conversation on Immigration said that they wanted to see reduced. It also continues the UK Government’s policy of dismissing Scotland’s unique demographic needs.

247. According to Home Office data released in 2018^[134], net migration from the EU has continued to declined from the peak in the year ending June 2016 (+189,000) to +87,000 in the year ending March 2018, its lowest level since 2012. The number of EU citizens who came to the UK in the year ending March 2018 was 226,000. The number of EU citizens leaving the UK (138,000 for the year ending March 2018) has remained stable following a previous increase between the years ending September 2015 and September 2017. This data shows that there has been an increase in EU migrants leaving the UK since the EU referendum and a slowing of EU migrants choosing to come here to work and make their homes. It is therefore incorrect to assume that the current levels of EU nationals in the workforce will remain in the roles they currently fill and therefore we can expect the number of shortages to rise.

248. According to this data there were approximately 112,000 family related visas granted in the UK, year ending June 18, this has fallen by 28% in the last decade. In a scenario where this doubles with EEA migrants included in the immigration system this makes approx. 224,000 family related visas UK wide. But it is important to note this is UK wide. In addition, there are no figures on the number of people on family related visas in the working population therefore it is impossible for us to assume they will be sufficient to fill the shortages suggested.

249. To date, Scotland has received over 2,450 refugees under the Syrian Resettlement Programme since October 2015. Home Office statistics published on 23 August 2018 show that of the 12,599 refugees who arrived in the UK under the Programme up to 30 June 2018, 2,326 (18.5%) were received by Scottish local authorities. Refugees working in Scotland make a great contribution to our economy.  However, refugees and asylum seekers come here because they are fleeing war and persecution in their countries of origin, not to seek employment.  We do not offer a place of safety on the basis of any economic contribution they might make but because we have a moral responsibility to do so.  

250. It is inappropriate to see asylum as a route for low-skilled workers, especially as many refugees bring a wealth of skills and expertise with them. One of the key issues for refugees is finding employment which matches their skills and experience.  We are working to reduce the barriers to refugees accessing employment appropriate to their skills through the New Scots refugee integration strategy and initiatives like the Refugee Doctors Project.

251. In terms of work, asylum seekers are currently not allowed to work while their application is being considered (except in certain very limited circumstances) – this can have significant impacts on their wellbeing and on long term career potential.  Home Office reasoning for this position is “because entering the country for economic reasons is not the same as seeking asylum, and it is important to keep the two separate”^[135]. Scottish Government believes that asylum seekers should have the right to work (although recognises that not all will be able to do so) and supports the objectives of the Lift the Ban campaign.

252. Following the publication of the MAC’s EEA report, a number of stakeholders in Scotland highlighted concerns that the report had ignored evidence from Scotland and Scottish Government expressed similar concerns, specifically that our evidence on Scotland’s distinct needs had been ignored. Despite this we have again produced a detailed response on tight timescales to ensure that the needs of Scotland are appropriately represented. 

Scotland’s Population Needs and Migration Policy

253. The EEA report concluded that Scotland’s needs were not significantly different to require a differentiated system as the challenges that we face are similar to those faced by the North of England. While there may be similarities, the report ignores the reality of the presence of devolved administrations and the Parliament. Scottish Government has been clear that we need a differentiated approach to migration tailored to meet Scotland’s distinct needs. The argument that because other regions of the UK are also impacted disproportionately does not support the conclusion that no differentiation is therefore required. Indeed the acknowledgement of that differential impact would therefore appear to strengthen the case for a differential solution.

Scottish Government Proposal 

254. Specifically, the Scottish Government has set out detailed proposals for how a system tailored to Scotland’s needs could work.

255. The current UK immigration system is complex for applicants and employers to navigate, and places many administrative and financial burdens on them.  The UK immigration system should be reviewed to make it easier to understand and comply with, for both applicants and employers; and to reduce the cost, including associated fees and charges, of applying for visas, leave to remain, and citizenship. 

256. The Scottish Government would do the same with any tailored approach to migration for Scotland it was responsible for: ensuring a clear route that was easy to navigate, and that costs were proportionate, for both applicants and employers. The proposal set out in our discussion paper, which explored how the current immigration rules could be adapted to allow for a new route to live and work in Scotland, would do this in a number of ways including the creation of a new ‘Scottish visa’.

257. Devolution of some aspects of the current immigration system could allow the Scottish Government, accountable to the Scottish Parliament, to set criteria for a new international migration route to start to meet Scotland’s most acute needs. This would include restricting migrants to living and working in Scotland, and working with the UK authorities on control and enforcement. 

No sponsorship role for employers

258. The visa category described in our discussion paper does not have a sponsorship role for employers, which would remove an administrative burden for small and medium enterprises. Instead an applicant-led points-based route could be created - similar to the 'points-based system' of other territories in their countries, including in Australia, and the previous Tier 1 general migration visa in the UK immigration system that the current UK government has withdrawn.  

259. Applicants would acquire points by providing evidence that they met criteria in categories such as age, education, skills, earnings and assets, and English language. Scottish Ministers would set those criteria, to be approved by the Scottish Parliament, in consultation with employers to match requirements of the Scottish labour market. If an individual reached the points threshold and was offered a visa, they would then be able to seek and take up work in Scotland, with the condition that they reside in Scotland for the time they are under immigration control.

No administrative and financial burdens associated with Tier 2

260. Employers taking on someone holding this visa would not need to have a sponsor licence, as it would not be a sponsored visa.  Scotland has a higher share of SMEs in the economy than other parts of the UK, and a lower proportion of Tier 2 sponsor licences. This route would help small and medium-sized businesses access skills and talent they are currently excluded from.

261. There would be no need to undertake the ‘resident labour market test’ when employing an individual under this route, as they would already be part of the resident labour market. We welcome the commitment in the UK Government Immigration White Paper to remove this test which is an unnecessary burden on employers.

262. The immigration skills charge would not be payable, as currently defined by the UK, as this visa route would not be within Tier 2.

263. This route would not require a certificate of sponsorship, and so would not be affected by the Tier 2 quota. We note that the Immigration White Paper commits to removing the Tier 2 cap but reaffirms the target to reduce migration to the “tens of thousands”. We have consistently opposed this and have outlined to the UK Government that if this were achieved, according to our analysis, it could cost  Scotland’s economy more than £10 billion per year in reduced growth by 2040. 

264. There would be no salary threshold to meet – although salary levels could be part of the points-based selection process. We welcome the consultation announced in the White Paper to review the salary threshold and will outline the evidence on the detrimental effect the £30,000 threshold has on Scottish business and for other stakeholders and providers. 

An additional route for migrants and employers

265. If a Scotland-specific visa were to be created within the UK immigration system, prospective migrants and employers would still have a choice about which route through the immigration system to pursue. A new Scottish visa would be in addition to, rather than in place of, existing visa routes. So an employer could continue to apply under a Tier 2 visa route if they required the ability to redeploy or relocate that employee permanently within the UK.

266. As noted, the Scottish Government proposals would add one significant new condition to visas issued in this way: the holders would be required to reside in Scotland for the time they are under immigration control.

267. This would be required: (1) to ensure that migrants entering through this route are encouraged to settle in Scotland for the long-term, to help address demographic changes that are more pronounced in Scotland; and, (2) in order that any tailored approach to migration for Scotland had the confidence of other parts of the UK, ensuring that individuals do not enter Scotland with the intention of living and working permanently elsewhere in the UK. The ‘high bar’ of the points-based selection process, and partnership working on monitoring and enforcement between the UK Government and the Scottish Government, would work to ensure that holders of this visa did not breach the condition to reside in Scotland, and that appropriate action was taken if they did.

Implementation, control and enforcement

268. Employer and public service checks: procedures that the UK Government has put in place already require employers and public services to check the immigration status of employees and service users. Such mechanisms would help ensure that migrants entering the UK through this route are compliant with the conditions of their visa, including restricting residence to Scotland.

269. Common Travel Area: partnership working in this way already exists within the Common Travel Area.  Both the UK and Ireland operate their own migration systems in which UK visa holders are able only to live and work in the UK, and Irish visa holders are able only to live and work in Ireland.

270. Administration: recent devolution of powers to the Scottish Parliament have seen two models of administration.  In one model, it would be possible for Civil Servants in the Home Office (through UK Visas and Immigration) to process and make decisions on applications under a Scottish scheme where Scottish Ministers have set policy and immigration rules.  In another model, a Scottish public body could be identified or created to undertake this work directly for Scottish Ministers.  Partnership working with HMRC on Scottish income tax, which they collect, reflects the first model.  The creation of Social Security Scotland in relation to devolving social security benefits reflects the second.  We would aim to consult on the most appropriate model for migration. 

271. Regional examples: both Canada and Australia operate devolved regional control, to address specific economic and demographic circumstances, within a national framework.

272. We recognise that utilising a ‘Scottish Visa’ would not be an appropriate option for every employer but it would be an additional route for employers looking to recruit the staff that they need. The Scottish Government proposals would overall reduce the burdens faced by employers, and would particularly open access to skilled migrant workers for smaller business where the Tier 2 system is too costly or administratively complex.  It would also offer a clear alternative to the confusing UK system - and instead one that was easy to understand and comply with.