Migration: Is the new points-based system a sleight of hand?

The government unveiled its new “firm but fair” points-based immigration system today. This new system explicitly aims to reduce overall levels of immigration by cutting the number of unskilled migrants entering the UK, while increasing the numbers of skilled migrants.

Under the new system all migrants will need to speak English, as well as have an offer for a job at an appropriate skill-level from a sponsor. The government is keen to insist this will be a fairer system which will reward merit, as well as encouraging British businesses to invest in increasing productivity instead of relying on cheap labour.

The government is also aiming to streamline visa applications to make the system easier to navigate for employers and applicants alike. While only a few details on this have been released so far the government does seem keen to increase the number of skilled workers overall. Notably there is to be no overall cap on migration. Previous governments’ promises to get migrant numbers down into the tens of thousands have been dropped.

Eligibility for skilled worker status is also going to be expanded fairly dramatically. Under the new system migrants will only need an A Level or equivalent qualifications to count as skilled workers, as opposed to the current system which requires BA or equivalent qualifications.

The government seems to be sending mixed messages here. The new system will require migrants’ salaries to meet a threshold of £25,600, though this is lowered to £20,480 for those in shortage professions or holding PhDs relevant to their jobs. If one looks at the sort of salaries that jobs which only require A Level qualifications for, few of them meet the threshold. For example, a marketing assistant’s average salary is only £18,863 according to Payscale.

This sort of oversight is worrying as it implies the issue was not fully thought through. If this just in the planning stage what will implementation look like? The Home Office already has a bad record when it comes to competently administering migration policy, as shown by scandals like Windrush. It is all very well for the government to say that it will communicate closely with employers to cushion impact and determine shortage professions, encourage training of British residents, and streamline the bureaucracy. It is quite another thing to see it happen.

The salary threshold also, deliberately, excludes a great deal of unskilled labour migration in an obvious attempt to push the total number of migrants down. However, the starting salaries of a number of patently “skilled” jobs do not meet the minimum salary threshold.

The shortage profession exception will provide a cushion for some vital areas such as the NHS. Currently 17.7% of registered nurses in the UK gained their qualifications outside the UK and the starting salary for an NHS nurse is  is £24,412, only rising to £26,220 after 3-4 years’ experience. Equally about 11% of radiographers are migrants whose NHS starting salary is £23,025.

A number of sectors such as agriculture, food processing, construction, freight, hospitality, and social care stand to lose out. These are all sectors which rely on migrant labour to do jobs that are difficult to automate.

The sheer depth of the potential problem becomes apparent when one examines some of these sectors in detail. Take agriculture for example. Many jobs in this sector are difficult to automate, and in 2017 labour shortages in the sector were already severe enough to spark a government inquiry into the issue.

This inquiry found 20% of full-time employees in the agricultural sector were migrants, mainly from the EU. For the 80,000 strong seasonal workforce a stunning 98% of the jobs were performed by EU migrants. The government’s proposal to allow in 10,000 seasonal workers will cut little ice with the National Farmers’ Union which is already demanding 70,000 temporary visas for 2021.

Two other extremely important sectors are hospitality and social care. The former is the UK’s fourth largest industrial sector employing and earning more than the aeronautic, pharmaceutical, and automotive industries combined. Roughly 25% of employees in this sector are migrants, split roughly evenly between EU and non-EU in their nationalities. In London the percentage of employees in the hospitality sector reaches an eye-popping 80-90%. Again, jobs like serving food or turning down beds are difficult to automate.

Meanwhile, social care is also already facing labour shortages with 120,000 vacancies in the industry. Currently 17% of adult care workers in the UK are migrants (8% from the EU and 9% non-EU). Since the average hourly pay in this sector in March 2018 was £7.89 per hour, lower than in most supermarkets, one can expect that few migrants will make the new £25,600 cut off. Perhaps we will go the way of Japan, a country where the lack of social care workers has become acute enough for people to seriously turn to robots. Roll on Nurse Ratchet?

It is hard to see how British workers alone will make up the shortfall. The labour market is already the tightest it has been for decades. Home Secretary Priti Patel’s claim that these jobs can be filled by the 8 million “economically inactive” people aged 16-64 is dubious. Of these 8 million less than 0.5% are the long-term unemployed. The vast majority of the rest are students, the sick, retirees, or looking after their homes and families.

One way to get around this would of course be to designate careworkers, and perhaps even fruit pickers, as shortage professions. Yet as Australia’s experience of its own points-based migration system shows the result is the government having to constantly play catch-up with the economy’s demands. It would also mean that the change to immigration in absolute numbers would be fairly limited.

This might be the government’s plan, banking on people feeling more relaxed about migration when they see it as under their control. There is some polling evidence for this. However, it seems very likely to me that if the total number of migrants does not shift a great deal worries about migration will persist in areas where local services have been put under strain by it. The question is then whether these constituencies alone will be able to push migration back up the agenda if other areas of the country are more relaxed.