Will Britain close its doors to immigrants post-Brexit?

Details have not yet been forthcoming, but Britain will soon have a new immigration policy. What will that mean for businesses and investors?

What changes are proposed to Britain's immigration system?

Like much of what the Johnson government has got planned, the broad outline is visible, but the detail is hazy. We know for sure that once the Brexit transition period is over (which the government says will be at the end of 2020) EU nationals will no longer have the automatic right to live and work in the UK. Freedom of movement will end. Instead, “Global Britain” will treat potential immigrants from all countries equally, deploying what the government calls an “Australian points-based system” to assess applicants. Although the government has now abandoned the Conservatives’ previous promises to bring net immigration below 100,000, it is clear that it wants the level to fall. “We are not going to fix on an arbitrary target,” said foreign secretary Dominic Raab during the election campaign. But “by exercising a points system you bring it down year-by-year”.

What is this points-based system?

Under the Australian system, foreigners applying for a work visa are assessed and awarded “points” based on various “economically relevant characteristics” such as education, language skills and work experience. Typically, an applicant picks a “skilled occupation” from a list, and needs to score a certain number of points to be accepted. Of course, that doesn’t necessarily bring immigration down: it depends how liberal or how restrictive you make your criteria. In the case of the UK, the stated goal of the system will be to attract lots of high-skilled workers, and workers in key shortage areas such as education and health, while deterring low-wage, lower-skilled workers – and gradually reducing overall net immigration. However, not everyone is convinced that such a system will work, or that it’s in the best interests of the UK.

Who’s sceptical?

The CBI for one. They and other business lobby groups worry that the Conservatives’ plans, under which the vast majority of migrants would need a job offer, could lead to skills shortages in key industries, such as construction. If you want to build houses, you don’t just need “the architects and designers”, says CBI director-general Carolyn Fairburn. “You need the carpenters, the electricians, the labourers. We need people to come and help us renew our economy. It’s not just the brightest and the best, it’s people at all skills  across our economy that we need.” Even more awkwardly for the government, the Migration Advisory Committee (MAC) – an outside panel of experts tasked by government with analysing the issue and offering guidance in a report – is also sceptical. Launching its report last week, the MAC’s chairman, Professor Alan Manning, dismissed the idea of a “points-based system” as a mere “soundbite” – and advised the government to have a rethink.

What did the MAC report say?

It basically recommends a hybrid arrangement: a points-based system only for skilled workers coming to the UK without a job offer (in practice a minority), plus a minimum salary threshold for people who do have a job to come to. Currently, unless they’re applying for an “exceptional talent” visa (capped at 2,000 a year), would-be immigrants apply for a so-called Tier 2 general visa, which requires them to have a job offer paying at least £30,000 a year. The MAC recommends cutting that threshold to £25,600, making it easier (for example) for teachers, NHS workers and younger professionals to qualify. The government doesn’t have to accept any of this – and its response has been non-committal, simply re-iterating its existing commitment to a points-based system to be introduced in 2021.

What would the effect be?

According to the MAC’s analysis, the effects of its proposals compared with the current situation would mean lower overall immigration, lower economic growth and lower population growth – but a bit less pressure on public services and housing. Overall, Professor Manning thinks the changes would lead to “very small increases in GDP per capita and productivity, slightly improved public finances, slightly reduced pressure on the NHS”, schools and social housing, but slightly increased pressure on the already stretched social-care sector.  

Does everyone agree with this analysis?

No. The lobby group Migration Watch UK, for example, which campaigns for lower immigration, argues that failing to put an explicit cap on skilled migrants – and scrapping the promise to cut net inward migration to tens of thousands – are likely to mean a post-Brexit surge in the numbers coming to the UK. “The electorate, including those who don’t usually vote Conservative, will expect Boris Johnson to keep his word on reducing immigration,” said the group’s chairman, Alp Mehmet. What’s likely to happen in practice, says The Economist, is that the government will accept most of the MAC’s recommendations for a hybrid model, but call it a “points-based system” anyway.

What do the public think?

What’s most striking is the extent to which immigration has fallen down the list of voters’ concerns since the 2016 referendum, says Sunder Katwala of the British Future think tank. Where once it topped electors’ lists of priorities, it now ranks a lowly ninth, according to a new ICM poll. That poll found that 79% of voters want the number of high-skilled EU workers to stay the same or increase. That proportion is 65% for seasonal EU workers, and 77% for high-skilled non-EU workers. Only a slim majority (51%) want to cut low-skilled EU immigration, with 31% thinking it should remain at the current rate. In short, the UK public is pretty relaxed, wanting a “balanced” system of immigration that secures its benefits while managing its pressures. Brexit is looking “less like it will make a decisive turn towards restricting immigration”, says Jonathan Portes in The Guardian. “Instead, consistent with the more benign aspects of our history, it may signal a different form of openness.”

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