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FSB welcomes report

Immigrant salary threshold ‘should be cut by £4,400’

Mike Cherry

Mike Cherry: ‘pro-business proposal’

The UK government has been advised to cut its salary threshold for immigrants and exercise caution over its plan for a points-based system.

Business groups have broadly welcomed recommendations by the Migration Advisory Committee (MAC) to reduce the threshold for all skilled incomers from £30,000 to £25,600 as a way of maintaining labour availability in key sectors such as the health service.

The committee said the government’s proposal for a points-based immigration system similar to that used in Australia would reduce economic growth.

It recommended points should only be used when it came to highly skilled migrants.

Prime Minister Boris Johnson called for such a system during his summer campaign to lead the Conservative Party and made it a key pledge during the election.

The report said: “Many stakeholders would prefer there to be no salary thresholds beyond the minimum wage.”

But the committee believed the threshold stopped the undercutting of the labour market, ensured migrants made a net positive contribution to the public finances, and made sure migration policy supported the “ambition to make the UK a high wage, high skill, high productivity economy”.

Professor Alan Manning, chairman of the committee, said: “No perfect system exists and there are unavoidable, difficult trade-offs.

“The largest impacts will be in low-wage sectors and the government needs to be clear about its plans for lower-skilled work migration.”

One in five small employers in the UK have at least one staff member from the EU.

– Mike Cherry, FSB

Joss Croft, CEO of UKinbound, a tourism trade association, questioned how the proposed change would work.

“A reduction in the proposed salary threshold from £30,000 to £25,600 (and from £20,800 to £17,920 for new entrants), whilst welcome, will not solve the skills shortage issue in an industry where the average full time wage is £23,000; and the rejection of the inclusion of part time workers (whose average salary is £17,000 and on which the industry relies to a significant extent) will also be detrimental,” he said.

Mike Cherry, national chairman of the Federation of Small Businesses, said: “The recommendation to lower the proposed minimum salary threshold to £25,600 is a welcome, pro-business proposal, which would widen the scope for employing those beyond highly-paid professions.

“It is vital that the workers and skills needed for the UK’s economy to grow are not locked out by a future immigration system which is unresponsive to business needs.

“One in five small employers in the UK have at least one staff member from the EU.

“FSB research shows that four-in-five small employers that hire staff into jobs classed as mid-skilled do so into roles with salaries less than £30,000. This includes positions in sectors such as engineering and IT.

“The recommendation for a route to the UK without a job offer is also positive, but this must be open to mid-skilled workers and not restricted to highly-paid professionals. It should allow for smaller businesses across all regions, nations and sectors to recruit the people with the skills they need.

“It is pleasing to see that the committee has listened to FSB’s arguments for a salary threshold below £30,000, as well as an unsponsored route, which selects migrants based on their personal characteristics and allows for regional variation.

“The challenge now for the government will be to have a new, employer-responsive immigration system in place in time for the end of the transition period eleven months from now, and allowing sufficient time for small business employers to prepare. FSB looks forward to working with the government on this.”

Tom Ironside, director of business and regulation at the British Retail Consortium, said: “In the pursuit of attracting the brightest and the best from around the world, we must not forget that retailers depend on a workforce across all skill levels. The operation of warehouses, food factories and city centre stores all benefit from the vital contribution from EU migrant workers.

“We need a system that enables swift and straight-forward recruitment across skill levels and avoids significant increases in the cost of employment.”

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