UNITED KINGDOM: Government Publishes Post-Brexit Immigration Proposals

On 19 December 2018, the UK Home Office published its long-awaited policy paper on its proposed future skills-based immigration system, designed to replace freedom of movement for EEA citizens after Brexit.

According to the proposal, EEA workers will be treated the same as non-European nationals under the existing points-based system, but with some amendments to the system following many of the recommendations of the Migration Advisory Committee (MAC) earlier this year.

On 20 December 2018, the Home Office published factsheets and statements related to the Immigration and Social Security Co-ordination (EU Withdrawal) Bill 2018, which will end the EU’s rules on free movement of persons into the UK and make EEA and Swiss nationals and their family members subject to UK immigration controls.

Analysis

Although the proposed changes will no doubt create more administrative hurdles for employers of EEA nationals in the UK, the easing of conditions for the employment of non-European workers may benefit some employers. It should be expected, however, that more employers will have to interact more often with the UK immigration authorities, and that this administrative challenge for the Home Office will increase processing times, at least during implementation of the new system.

It should also be noted that the future relationship negotiations with the EU, as well as bilateral negotiations with other countries, are likely to reopen the question of mutual migration rules, so that more relaxed, reciprocal arrangements could replace the rules set out in this policy paper for EEA nationals and others.

Skilled Workers

The proposed changes for skilled workers include:

  • Scrapping the overall cap on the number of visas for skilled workers that can be issued (currently imposed on the Tier 2 (General) category)
  • Lowering the skills threshold to include RQF levels 3-5 (A level or equivalent)
  • Abolishing the Resident Labour Market Test (RLMT) for skilled workers
  • Making the sponsorship system as “straightforward and light-touch as possible”

The MAC also proposed maintaining the minimum salary of £30,000 but, after objections from Ministers and business leaders, this recommendation has not been adopted. The minimum salary will be decided at a later date, and could be significantly lower.

Analysis

Employers are likely to find that the proposed new rules make it easier than at present to employ non-EEA nationals (provided the eventual minimum salary level is not too restrictive).

The current RLMT requirement is an administrative burden for employers and the Tier 2 (General) cap is limiting, so removing these requirements should help employers.

However, this will likely be balanced by the need for employers to interact more often with the system in the absence of freedom of movement. Companies who currently employ EEA nationals and don’t hold a sponsor licence are likely to find that they have more hurdles to jump through to obtain a sponsor licence, pay fees and fulfil reporting duties.

Low-Skilled Workers

Low-skilled workers who do not meet the skills and salary criteria will, as a transitional measure, be limited to a twelve-month work visa with a cooling-off period of a further 12 months. This route will only be open to “nationals of specified countries, for example low-risk countries with which the UK negotiates migration commitments and mobility proposals.”

Workers on this route will not have a right to access public funds or extend their stay, switch to other routes, bring dependents or settle permanently.

Analysis

Employers may be able to use this transitional, unsponsored work visa route for short-term assignments, thus reducing the financial and administrative burden compared with sponsored visas for skilled workers.

However, compared with employing EEA nationals for such short periods under freedom of movement, as at present, this clearly represents an additional administrative challenge. Moreover, the government emphasises that this scheme is intended to be transitional, and therefore perhaps employers should not rely too heavily on it in the long term.

Youth Mobility Scheme

The paper proposes a UK-EU Youth Mobility Scheme, similar to the existing schemes available for nationals of Australia, Canada, Hong Kong, Japan, Monaco, New Zealand, South Korea and Taiwan. These existing reciprocal arrangements allow people aged 18-30 to come to the UK for two years, during which period they can work or study.

Any UK-EU version would depend on the outcome of bilateral negotiations but could provide employers with an extra source of foreign labour.

Visitors

According to this proposal, EU national visitors will not require a visit visa in advance to enter the UK and will be able to carry out a range of activities, including business and certain paid activities.

An Electronic Travel Authorisation (ETA) will be introduced, similar to the US Electronic System for Travel Authorization (ESTA) and the upcoming EU European Travel Information Authorization System (ETIAS).

Students

International students will be given the opportunity to switch into the skilled worker route up to three months before the end of their course in the UK, and from outside the UK up to two years after their graduation.

Moreover, those who have completed their bachelor’s or master’s degree in the UK will have six months’ post-study leave, giving them more time to find permanent skilled work and to work temporarily during that period. PhD students will have a year, according to the proposal.

EU Settlement Scheme

EEA nationals already in the UK on ‘Brexit Day’ (29 March 2019), and those arriving before the end of the transition period, will be able to formalise their permission to stay in the UK though the EU Settlement Scheme, which is already being tested. In the absence of a withdrawal agreement with a transition period, the deadlines for qualifying and applying for this scheme will be brought forward (see our previous article here).

Common Travel Area

The Common Travel Area (CTA) and associated rights between the UK, Ireland and the Crown Dependencies will be unaffected by the UK’s exit. British and Irish citizens will continue to be able to travel freely within the CTA without immigration controls or residence or work permits.

UK Nationals in the EEA

It should be remembered that post-Brexit, UK nationals will no longer have freedom of movement in the EU or other EEA countries, and will likely have to apply for work visas for France on the same basis as US nationals, for example. Currently, EU member states are silent on the specifics of their plans for work immigration rules for UK nationals.

Again, the outcome of future relationship negotiations between the UK and the EU could well include mutual concessions on labour mobility which would ease the way for UK nationals seeking work in the EU, but a long period of uncertainty is likely before any such measures are agreed and implemented.

Economic Impact

The Home Office admits that these changes would lead to “a cumulative fiscal cost of between £2 billion and £4 billion over the first five years (2021-2025)”:

“…these long-term work proposals could reduce the UK workforce by between 200,000 and 400,000 EEA nationals over the first five years, which we estimate could mean GDP is between 0.4 per cent and 0.9 per cent lower than it otherwise would have been in 2025. This represents a reduction in GDP per capita of between 0.1 per cent and 0.2 per cent in 2025.”

Implementation

The new system is intended to be phased in, and will start to operate from the end of the transition period (end of 2020, but extendable).

However, the withdrawal agreement which includes the transition period has yet to be ratified by the UK and European parliaments. Plans for immigration in the case of a no-deal Brexit are not yet known.

Our Advice

Employers concerned about Brexit and the future UK immigration rules are encouraged to contact their Newland Chase specialist for more specific advice.

Current UK sponsors should be sure to maintain their existing sponsor licence and compliance obligations, to minimise disruption under any new system.

Employers concerned about the future work mobility of UK nationals in the EU can also rely on Newland Chase’s global immigration services and expertise.

For general advice and information on immigration and business travel to the UK, please email us at enquiries@newlandchase.com