The proposed “Australian-Style Points-Based System” (PBS) could move the debate away from salary as the sole measure of skill
The Government’s announcement in the Queen’s Speech and in the Conservative Party election manifesto to implement an “Australian-Style Points-Based System” (PBS) for visas, presents an opportunity to re-frame the debate about skilled migration towards criteria other than salary as a measure of the applicant’s ability and worth to the UK economy.
The debate about visa salary thresholds triggered by last year’s Immigration White Paper (IWP) has been overtaken by announcements in the Queen’s Speech and in the Conservative manifesto to implement a PBS. Details are currently scarce on how the Government intends to implement a PBS if they are re-elected. It is also unclear which elements of IWP, such as the £30k minimum salary threshold, might be retained in future proposals. The Migration Advisory Committee is currently consulting on both the salary threshold and the PBS and is due to report in January 2020.
The Australian PBS is a visa route for individuals with requisite skills defined by the Australian government, but without specific job offers. However, the Conservative manifesto clearly states their intention to require skilled migrants to have job offers. It looks as if that the government wishes to cherry-pick some elements of the Australian points-test to create a bespoke hybrid system for the UK.
UK Screen Alliance generally supports the introduction of a cost-effective points-based employer-sponsored approach, if does not also have a restrictive salary threshold, notwithstanding that our first preference would be for a continuation of free movement for EU skilled workers. A PBS could offer a genuine skills-based approach rather than one where the ability of employers or individuals to afford the visa, is the lever used to control immigration levels.
There is a global shortage in virtually all skilled roles in the Creative Industries, as acknowledged by the welcome recent expansion of the Shortage Occupation List to include all occupations classified as Artists, Graphic Designers or Arts Officers, Producer and Directors.
VFX and animation employers are firmly committed to the development of a home-grown workforce through the development of apprenticeships, T-Levels, work experience and engagement with HE, FE, schools and careers advice. However, even if employers were able to populate more jobs with UK emerging talent, they would still need to employ the most skilled international practitioners at all levels, as we compete in a global market and our international clients expect the very best the world has to offer.
The case against salary thresholds
The Immigration White Paper (IWP) of December 2018 proposed that there should be a minimum salary threshold of £30k for Skilled Worker Visas in a new immigration system for both EEA and non-EEA migrant workers, due to be implemented from January 2021. Whilst the IWP claimed to create a skills-based visa system, in reality it would create an expensive regime where the lever of control over migrant numbers is an employer’s ability to afford the international talent which is vital to their success. Therefore, UK Screen Alliance welcomed the Home Office commission to the Migration Advisory Committee (MAC) to re-examine the salary threshold proposal and to investigate a point-based system. However, to implement a PBS which also features a high salary threshold would be highly damaging for businesses.
Salary alone is not a good proxy for assessing skill. A threshold of £30k may not be an issue for the more highly paid parts of the economy, like financial services or fintech, but a blanket £30k minimum disenfranchises many sectors, not only the Creative Industries but also health, social care and hospitality etc. where remuneration for those at the early to mid-stages in their careers will not reach the required threshold. We estimate that a £30k minimum salary threshold would add 3 to 5% to our sector’s payroll costs, as it would need to be applied to all workers, not just migrants, in order to avoid industrial unrest. Whilst the MAC may argue that increasing salaries will make jobs more attractive to UK workers and increase productivity, there is a real danger of causing unaffordable wage inflation which will impact profitability and drive work overseas as a result.
We feel that the MAC should advise the Home Office to give more weight to the value the whole organisation creates, where every employee, from early career level to senior manager, plays a part in a team to deliver a product or service, rather than just the value an individual employee creates as a result of their personal salary.
If the immigration system continues to be salary focussed, a threshold in line with National Living Wage would be more appropriate to ensure that all business have the access to the international talent that they need.
A points-based visa system in practice
At first sight, an Australian Points Based System may not appear to be entirely appropriate for deployment in the UK. It is designed to encourage skilled migration into a large country with plenty of space, rather than limiting immigration; a basic policy aim of the current government. The Australian system is designed to increase the human capital available in strategic areas decided by government and in contrast to the current UK visa system, it is possible to enter Australia as a skilled migrant without employer sponsorship or a firm job offer. In fact, Australia does not use its point-based system for migrants who are employer sponsored with firm job offers. However, a PBS could be combined with employer sponsorship to make a viable system which is bespoke to the needs of the UK.
A key advantage of the Australian PBS is that it allows multiple ways of qualifying based on a blend of points awarded for age, relevant experience, educational qualification, language proficiency, skills assessment and shortage occupation status. Implementing a similar points-based system in the UK could therefore provide a welcome alternative to the current inaccurate and unfair salary-focussed assessment of skill-level.
The UK’s challenge will be to design a system which balances the points available for various criteria to allow employers affordable and appropriate access to overseas skilled workers.
For example, sufficient points for visa qualification should be assured for a 24-year-old French citizen with acceptably proficient English, who has a confirmed entry-level job offer in the UK as an animator in a VFX company (a role on the Shortage Occupation List); with a graduate-level qualification from one of the many excellent French animation schools, even though the going-rate median salary for junior animators is £24,000. It is unlikely that such a person would be a burden on social services, and they could go on to build a long career in the UK with good salary growth in a high-tech, high-profile and high-productivity occupation, delivering net value to the UK economy over many years.
The Australian PBS suffers from long application times, sometimes in the region of 21 months. UK Creative Industry employers would be incredibly frustrated by this, as they need to be agile in responding to the rapid changes in the resource needs of their project-based businesses. Streamlined application processes with rapid decisions are vital. It may therefore be desirable to retain elements of the UK’s current sponsorship regime where employers collate much of the application information in parallel with the recruitment and selection process, and by the fact that they offer a confirmed job, have by default, assessed the skills of the applicant as being appropriate for the role. There should be no need to have visa applicant’s skills and capability assessed by an external designated competent body as featured in the Australian system, thereby speeding up the process.
UK Screen Alliance advocates that two PBS visa routes should be implemented in the UK for skilled workers; a fast-track employer sponsored route for confirmed job offers; and a non-sponsored route to attract individuals and allow more strategic migration into regions or sectors where human capital is in general shortage.
With many creative projects being “green-lit” very late and deadlines frequently being subject to change, employers require an extremely agile visa system to access talent from Europe at short notice. We feel that licensed employer sponsors should be able to engage skilled migrants from trusted countries (e.g. EU) at zero notice and apply for the visa within 14 days after the date of entry.
Making visas affordable
The current Tier2 (general) visa is already one of the most expensive visas in the world; at least 5 times more expensive than the equivalent Canadian visa for example. The Skilled Worker Visa proposed in the IWP of 2018 would be based on the Tier 2 cost structure and would widen the scope to include EU and EEA citizens. This would significantly increase recruitment costs.
The price for a five-year visa for a skilled worker coming to the UK with a partner and 2 dependent children could reach £24,000. This is a major disincentive and must be reduced if the UK is to remain a magnet for international talent.
The Conservative manifesto proposes to increase the Immigration Health Surcharge (IHS) to £625 per year from £400. As this is paid on all visa types and by partners and any dependent of the primary visa holder, this adds significant new cost to skilled worker visas. The Conservatives claim that migrants should pay their fair share towards the National Health Service. We do not agree with their justification for this increase or even for the existence of the surcharge. Skilled migrant workers are not health tourists. They come to the UK to work and in doing so, they pay income tax, national insurance contributions, VAT and other duties, just like UK workers do and should not have to pay extra for the NHS just because they weren’t born in the UK.
In addition to the inevitable application and processing fees, the proposed visa will continue to attract the Immigration Skills Charge (ISC) which makes up around half of the total visa cost. The Migration Advisory Committee concluded that there was no evidence that the ISC was being used by the government to fund education or training programmes to bridge the skills gaps being filled by overseas workers, as originally intended. It is merely a tax on immigration. Nor is there is any evidence that the ISC is succeeding in inhibiting migration as the number of non-EEA skilled workers has increased. Businesses either take the hit on profitability from the ISC or forego the opportunity to expand in the UK as a result of insufficient UK skilled workers. International businesses are more likely to invest overseas as a result.
We believe that the Immigration Skills Charge should be scrapped, especially for roles on the Shortage Occupation List, where it makes no sense at all to penalise companies from recruiting overseas when a UK shortage has been acknowledged. The Immigration Health Surcharge is unjust and should also be scrapped entirely.