Northern Ireland forgotten in the new immigration system
25 February 2020
Some thought it would never happen but, on ‘Exit Day’ (31 January 2020), the UK officially left the European Union. With that departure, we prepare to welcome a new points based immigration system. A recent Westminster policy statement issued on 19 February 2020 details how the UK needs to shift the focus of our economy from a reliance on EU labour and instead concentrate on investment in technology and automation. In turn, employers have been advised by Government that they will “need to adapt and adjust”. The government believes the new system will allow Britain to attract the “brightest and best people from the whole world” to come and live and work in the UK, giving priority to those with the highest skills including scientists, engineers and academics.
But what is the cost of all of this to our Northern Ireland economy and how will this impact on the day to day operations of our businesses?
The new points based system
In practical terms, there will be no changes to immigration between the UK and the EU until 1 January 2021. On 1 January 2021, free movement rights will end for UK nationals travelling to the EU and vice versa as the new UK points-based immigration system comes into play (setting aside the new system will not affect the Common Travel Area between NI and RoI, nor does it impact Irish nationals). At present, the UK has a dual system of admitting highly skilled workers from outside of the EU and workers of all skill levels from the EU. This will be replaced with a single route which provides access to both highly skilled and skilled workers from all countries. Both EU and Non-EU nationals will therefore be treated equally under the new system which will assign points to migrants for specific skills, qualifications, salaries or professions and visas will only be awarded to those who gain at least 70 points. All applicants will be required to have a job offer and employers will be required to use the Home Office online visa system to lawfully employ migrant workers. The new system has no specific route for low skilled workers.
The unique position of Northern Ireland
The Migration Advisory Committee (MAC) is an independent, non-departmental public body that advises the Government on migration issues. In its report to Government on the new 2021 immigration system, MAC suggested that the salary threshold under the new system be reduced from £30,000 to £25,600 for migrant workers.
MAC also considered whether to introduce a regional variation salary threshold (i.e. a different threshold for areas such as N.I. and Scotland) but advised against this, preferring to target recruitment challenges in “more remote” areas with pilot visa scheme which could cater for that area’s particular needs. The MAC did recommend that special consideration be given to Northern Ireland as it is in the unique position of sharing a land border with Europe and has a distinct labour market. However, whilst the Government accepted that the salary threshold should be reduced to £25,600, they seem to have ignored MAC’s reference to N.I.’s unique position in its policy statement.
N.I. businesses, employer’s associations and politicians have voiced concerns that the new immigration system ignores the needs of Northern Ireland and will severely damage the economy. The reality is that the proposed new threshold is not economically viable. Even highly skilled migrants coming to Northern Ireland will fail to meet the salary threshold as we have the lowest median full-time annual salary (around £18,000 in the private sector) – around 15% lower than the UK average. As such, even a reduction of the salary threshold to £25,600 will have little to no benefit to Northern Irish businesses as this is still in excess of the salaries of some highly skilled workers. That being the case, many sectors will undoubtedly begin to struggle to fill vacancies and grow their businesses.
Additionally, unique to Northern Ireland is the fact that businesses work in an all-island basis in that supply chains are integrated and labour is pooled across the island of Ireland. For instance, in the food and drink sector, the supply chain starts with agriculture, then logistics and ends with retail and can span across N.I. and Ireland. There will no doubt be a ripple effect when businesses at the top of this supply chain are affected.
In September 2018, CBI NI, issued a report entitled “All Together Better.” In that report, CBI NI found that 65% of all migrant workers in N.I are from the EU compared to 40% across the UK as a whole. This clearly highlights the fact that Northern Ireland relies heavily upon migrant workers and further, that the Northern Irish economy in turn benefits from its EU migrant workforce. Due to its reliance on current free movement rights, over 98% of N.I. businesses have not engaged with the Tier 2 visa system because, quite simply, they haven’t had to (until 2021 that is). Worryingly, the MAC has estimated that 70% of the EU citizens who came to work in the UK since 2004 would be ineligible under the new system. Those individuals will only be able to remain in UK if they apply for settled status under the EU Settlement Scheme. So where does this leave Northern Irish employers?
With very little time for businesses to prepare for the new system (which still needs to be signed off by Government), already employers have begun to voice concerns that the new UK immigration system will result in a recruitment crisis in sectors such as care, hospitality, tourism and agriculture given that the new system has no specific route for low skilled workers.
Active steps for N.I. employers
Whilst businesses can only hope that their representative associations and our politicians focus once again on the unique position of Northern Ireland and will be urging the Government to tailor the immigration system for N.I. But in the meantime, what can employers do to prepare for the new immigration system?
Employers will be forced to take active steps to future proof their recruitment. Some employers might consider taking advantage of free movement rights up until 31 December 2020 in order to ensure they are not left vulnerable from 2021 onwards.
Employers should also consider:
- Securing their existing EU labour workforce – ensuring that EU workers have signed up to the EU Settlement Scheme and apply for settled status.
- Putting in place the resources necessary to facilitate the online visa system including providing training (when necessary) to key members of staff.
- Budgeting for the administrative costs associated with becoming a licensed sponsor and the visa costs per migrant worker.
- Updating current policies and practices to ensure that new “right to work” checks are undertaken from 1 January 2021.
Northern Irish businesses are certainly facing challenging times ahead. Hopefully, Northern Ireland’s unique position will, in time, be fully considered by Government but, in the meantime it isn’t enough to simply do nothing. Employers should take active steps to ensure that they are prepared for the potential difficulties which will result from the inevitable future EU migrant shortage.
If you would like to discuss further how the new immigration rules might affect your business, please contact Leona Rankin, Associate at Carson McDowell LLP.