What May's post-Brexit immigration plans mean for construction

The Daily Mail calls it a revolution, but what impact could the government’s latest proposals really have on the industry? John Hayes assess the plans.

The Government will introduce a “geography-neutral,” skills-based assessment of economic migrants seeking work in the UK. This begs two questions: Is this a revolution? And if so, what does this mean for business and, in particular, the construction industry?

The answers to these questions are: “Possibly” and that “the proposed changes will add significantly more costs to employers and result in staff shortages and wage increases.”

Is this a revolution?

Answer: “Yes, unless we do a deal with the EU which means that it isn’t.” At present, the Government proposes, after a Brexit transition period, all new migrants planning to live and work in Britain would have to demonstrate that they are sufficiently skilled by meeting a minimum salary threshold. At present, this figure is set at £30,000 per annum. Further, this is only possible if employers agree to sponsor them under the Tier 2 visa scheme.

(Note: EU workers already here have been assured of their status and would not need to leave).

The Government is, in terms, proposing a massive expansion to the Tier 2 visa scheme, which will now apply to all economic migrants. Experts in this area are concerned that the resources do not exist in the Home Office to handle this expansion. At present non-EU economic migrants account for approximately 50% of the UK migrant workforce. Therefore, the Government is proposing a 50% expansion to the Tier 2 visa scheme.

Tier 2 visa applications are more expensive and more time consuming than the current process of recruiting highly skilled EU migrants to the UK: at present, there is no “entry cost” so far as these workers are concerned.

There are two riders to the “revolution theory:”

(1) there may be a Brexit transition period (of up to two years) in which the current entry-rules would remain in place;

(2) it is possible, under any “free trade deal” with the EU, or indeed any other country (India, for example, is asking for this) for preferential treatment of certain types of workers to be negotiated.

What about low skilled workers?

This is the real problem for the construction industry. The Government’s position is simple: these workers will simply not be allowed to enter the UK. The Government says: (in terms) “recruit British workers.” But what if British workers are not able, or willing to fill the shifts? The result is bound to be increased bargaining power for those already on site, increased hourly rates, increased overtime.

Solutions

There are two potential solutions:

The first (and the one the sector should get behind) is to campaign for the opening of the Tier 3 visa system: it exists, but it is not used by the UK Government. The UK Construction industry should campaign for its use.

An alternative (sponsored by the Migration Advisory Committee (MAC), last month) is the expansion of the UK’s youth visa mobility scheme.  The MAC also makes some other good recommendations, which you can read here: www.gov.uk/migration-advisory-committee.

These are significant resourcing challenges for the UK construction industry.

The other challenge is that the Government, thus far, has trumpeted proposals, in broad terms, but without specifics. Businesses do not know how long they will be given to adjust to the new immigration regime. At some stage, the Daily Mail articles will have to stop and (we hope) the real guidance for businesses will have to begin.

A version of this article first appeared in Construction News on 4th October