Unsurprisingly, the proposals spell an end for Free Movement from the EU and would see EU nationals treated in the same way as non EU nationals. This is hardly a surprise given it was a key component of the Brexit vote and a central part of the UK position in negotiations with the EU.
Instead, the paper proposes extending the current Tier 2 visa system, albeit with some tweaks, to cover EU nationals. This system currently applies to skilled workers from non EU countries and involves businesses registering with the Home Office for licence to bring overseas workers to the UK. Once this licence is granted, the business can hire non EU nationals to fill jobs that are skilled to degree level if they can demonstrate there are no suitable UK workers for the role and that they will pay a minimum salary based on Home Office guidance. The minimum salary ranges from £30,000 to £60,000 depending on the role (regardless of location), and there is a monthly cap on the number of new visas that can be issued.
The current system is burdensome and expensive for employers, who have to comply with lengthy Home Office guidance in order to retain a sponsor licence. As a result many businesses choose not to have a sponsor licence: Government statistics estimate there are 5.7 million private businesses in the UK and the latest register of sponsors lists just under 30,000 businesses with a sponsor licence.
If the current system is to be extended to any business that intends to employ EU nationals there will need to be a large increase in the number of registered sponsors, and an SME can expect to pay £536 for a 4 year licence.
The proposals indicate that the current system will changed, and the changes include:
Lowering the skill level from degree level to A level;
Removing the monthly cap on new visas being issued;
Removing the advertising requirement; and
Reducing burden to employers, although little detail is given on how this will be done
The Government will also consider lowering the minimum salary level. In my view this will be essential as unless the £30,000 threshold is reduced, the lower skill level will be meaningless.
While some of these changes sound positive in theory, there are some major concerns for employers:
The cost of the system is unclear and, given businesses will have to pay an Immigration Skills Charge (of up to £1,000 a year) each time they sponsor an EU worker, may be prohibitive for many SMEs;
Even a streamlined system is likely to impose an administrative burden on businesses, increasing costs; and
It is proposed low skill workers, vital in some sectors such as hospitality and retail, will only qualify for 1 year visas. They will need to leave the UK at the end of their stay and will not be allowed to come back for at least 12 months.
The White Paper is the start of a 12 month engagement process, so the proposals may change in the coming months, but they highlight the importance of businesses taking steps to safeguard their existing EU employees (who will not be covered by any new system) as future recruitment will be more difficult and increasingly expensive.