The UK needs a more flexible model for labour migration

Posted on 25 Jun 2018 by Jonny Williamson

With the announcement to lift the visa cap for nurses and doctors, and the new ‘settlement scheme’ for EU citizens, the UK government is heading in the right direction. But which actions will it take to tackle the skills shortage the UK industry faces?

The UK government heads in the right direction regarding a new migration policy – image courtesy of Depositphotos.

The government lifted the visa cap for nurses and doctors, and last week, the Home Office announced a new settlement scheme to make it easier for EU citizens to stay in the UK after 2020.

With these two announcements, the UK government heads in the right direction regarding a new migration policy which is important for Post-Brexit-Britain.

However, it remains a debatable point whether these steps are also sufficient to tackle the UK’s skills/productivity gap the industrial sectors in the UK face.

One of the announcements is that doctors and nurses will be taken out of the Tier 2 visa cap as part of the UK’s post Brexit ‘managed migration policy’.

No restrictions will cap the numbers of doctors who can be employed through the Tier 2 visa route, which is a reaction to the fact that around 16% of the NHS doctors say that their nationality is neither British nor European.

The eventual relaxation of immigration rules follows a campaign by NHS organisations and medical groups, and recent official figures show that the NHS in England alone is short of 9,982 doctors.

The lifting of the visa cap for doctors and nurses was great news for the NHS.

However, why is the government still so reluctant to act when it comes to tackling the Tier 2 visa cap for other economic sectors – especially for manufacturing?

Westminster took another important step to solve the country’s productivity puzzle with the announcement of a new settlement scheme for EU citizens.

This enables them to apply for settled status in three easy steps including an identity and a residence proof as well as a clean criminal record (for less than the price of a passport). To be eligible for settled status, an applicant needs to have started living in the UK by 31 December 2020.

Official figures show that the NHS in England alone is short of 9,982 doctors – image courtesy of Depositphotos.

This was good news for EU citizens who work in the UK, because the government declared that ‘EU citizens make a huge contribution to the UK economy and to society’.

A crucial question remains: ‘Could the settlement scheme be considered ‘good news’ for the UK industry as well – as an effective measure to get the skills gap the UK faces under control?’

Unfortunately, it is hard to answer the question with a straight ‘Yes’.

Around 1.25 million non-UK nationals from outside the EU are currently working in the UK; within the last year alone, the number increased by 20,000. Whereas the number of non-UK nationals from EU countries working in Britain decreased by 28,000 to 2.29 million, according to the ONS.

More citizens from non-EU countries come to the UK and less citizens from EU countries, and to ensure that the number of EU citizens in the UK does not decrease further, the government was urged to announce a settlement scheme that is EU citizen friendly until 2020.

EEF believes that the settlement scheme does not tackle the UK’s long-term EU migration challenges.

Tim Thomas, director of Employment and Skills Policy at EEF, said to The Manufacturer: “The settlement scheme tells us nothing of the UK’s long-term approach to EU migration; it only tells us that EU citizens in the UK before December 2020 can settle here permanently.

“We need a broad and flexible settlement, beyond 2020, that gives EU citizens at all skills level ready access to the UK labour market.”

Three quarters of manufacturers struggle to fill roles

As the eighth largest manufacturing nation in the world, UK manufacturing employs roughly 2.6 million people and provides 13% of business investment.

The sector creates jobs year-on-year and is heavily reliant on migrant workers both from the EU, which make up 11% of the workforce manufacturing sector, and outside the EU (3%).

EEF has warned that a quarter of the firms it represents had seen job applications from the EU fall, and 16% had seen more European workers resigned since the 2016 referendum.

Combilift set up a brand new welding department in its new factory - image courtesy of The Manufacturer.
Manufacturers warned that uncertainty over recruitment would restrict growth and damage the British economy – image courtesy of The Manufacturer.

With most of the companies relying on EU staff due to a lack of skilled UK applicants, manufacturers warned that uncertainty over recruitment would restrict growth and damage the British economy.

EEF warned that with three quarters of manufacturers surveyed saying they were already struggling to fill roles, a cap on EU and non-EU staff would exacerbate the skills gap situation.

The settlement scheme only prevents the outbreak of a skills gap catastrophe after 2020, and from the perspective of industries it is only a gentle form of damage containment.

The problem is that the UK government needs to go further; it must work on a new long-term work migration solution that goes beyond lifting the visa cap for non-EU-nationals and setting up a short-termed settlement scheme for EU citizens.

The UK needs a long-term labour migration solution

EEF thinks, viewed in the short-term, the skills gap must be alleviated by a far better system of migration for non-EU nationals.

Tim Thomas said to The Manufacturer that more than half of the roles on the shortage occupation list can be found in the manufacturing sectors (The shortage occupation list is an official list of occupations for which there are not enough resident workers to fill vacancies).

Therefore, he said, there is a strong case for taking these jobs outside the cap until evidence shows that the UK labour market can supply the needs of manufacturers.

In the long-run, Thomas added, the UK needs better domestic policies which help, not hinder, manufacturers’ existing training schemes, a flexible model for EU migration and policies that genuinely act as a beacon for the UK to attract talent from around the world.

‘TheCityUK’ industry body also argues that the government should create a framework within which the Home Office would retain responsibility for setting high level immigration policy objectives with a new set up Skills Advisory Board.

The Board would have responsibility for issues, such as how to utilise skilled, employer sponsored migration to fill skills shortages in the UK, and best benefit the economy and the existing resident population, and it could take decisions more quickly based on reviews and on annual reports and statistical analysis.

One thing is clear, it is high time for the government to take heed of EEF’s warning and consider serious actions to either lift the visa cap for UK industry sectors or to completely restructure the immigration system – otherwise it will be difficult to bridge industry’s productivity gap.